Sega Sued for $5M Over ‘Rigged’ Key Master Arcade Games

Japanese video games giant Sega is facing a proposed $5 million class-action lawsuit over the arcade machine Key Master, which alleges the game is “rigged” against players.

Key Master machines operate along similar principles to claw crane machines. But instead of using a mechanical claw to grab at prizes, players are invited to guide a key into a lock to win merchandise.

As the lawsuit notes, it is billed as a skill game, but in fact, has more in common with a game of chance. That’s because your prospects of winning are predetermined, like a slot machine, where the house edge is built into the payout percentage.

But unlike slots, the machines are programmed to allow players to win prizes only at certain intervals, which are determined by the number of player losses. The threshold is set by the manufacturer at 700 failed attempts, although this can be modified by the operator.

In other words, the machine will not award a prize unless it is ready to do so. For the rest of the time, it’s programmed to slightly overshoot the keyhole.

Rigged Machines

That’s different from slots, where odds merely act as a guideline on when payouts are delivered, on average. While the edge is always against slots players, they still have the chance to win with every spin. Key Master players, usually unwittingly, do not.

The lawsuit notes the game is portrayed inaccurately as a “simple game of pure skill with a straightforward directive,”

Nowhere on the Key Master Machine do Defendants inform consumers of the truth: that the machines are rigged so that players can only win prizes at certain times,” the lawsuit continues.

“Defendants have refused to cease their deceptive conduct and continue to manufacture and advertise the Key Master Machines as games of skill, as opposed to the illicit gambling machines they truly are. This refusal, and continued marketing of the Key Master Machines as games of skill, only serve the profit interests of Defendants.”

Games Banned in Arizona

This is not the first lawsuit that has been directed at Key Master. In 2019, the state of Arizona sued a company that distributed the machines, Pittsburgh-based Betson Coin-Op, not to be confused with the Swedish online gaming giant Betsson.

Sensing trouble, Sega has stopped manufacturing Key Master, now supplying only a purely skill-based alternative called Prize Locker, although Key Master machines remain in circulation internationally.

The new lawsuit argues this amounts to tacit acknowledgment Key Master was “rigged.”