Sega sued for ‘rigged’ Key Master arcade machine

Sega’s Key Master arcade game is causing problems for the company once again. A new lawsuit alleges that Key Master is intentionally rigged against players. It’s marketed as a game of skill, but players claim machines bar against awarding successful runs, making Key Master more of a chance-based game.

Marcelo Muto filed the lawsuit on Monday in a California court. It’s a proposed class action lawsuit looking for $5 million in damages to be distributed amongst wronged consumers. With Sega, Play It! Amusements (which is owned by Sega and now called Sega Amusements) and Komuse America (which co-manufactures Key Master) are named in the suit.

Key Master has been the target of multiple court cases in the past, dating back to at least 2013. This 2021 lawsuit, as well as the others, claims these machines are rigged only to allow players to win prizes at certain times — specifically, at intervals determined by player losses.

You’ve probably seen Key Master machines in malls or arcades, touting prizes like iPads, earbuds, and other pricey electronics. To play, you must navigate a key towards a specific keyhole by stopping the automatic movement by hitting a button. If the key goes in, you win the prize. The problem, according to the lawsuit, is that these machines are programmed to only allow players the ability to win after a certain number of player failures.

a photo of the key master arcade machine

Image: Marcelo Muto via class action complaint

“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,” lawyers for Muto said in the lawsuit.

If the machine is not ready to award a prize, it’s allegedly programmed to overshoot the keyhole — even if the player hit the button at the correct time — and force the player to lose. This is demonstrated in some videos on YouTube: A player named Claw Craziness suggested that player can tell when a machine is not ready to pay out a prize, if they know the secrets.

The problem here is that Key Master isn’t marketed as a game of chance. It’s portrayed as “a simple game of pure skill with a straight-forward directive,” lawyers said. However, lawyers said that the deception behind the machine — that it won’t award players until certain settings are met — is laid out in the game’s manual, which was provided alongside the lawsuit as evidence. In the manual, according to screenshots, the Key Master machine “will not reward a prize until the number of player attempts reaches the threshold of attempts set by [the] operator.” Lawyers for Muto said the default setting is 700, but that each machine can be programmed by individual operators.

In 2015, Sega and another angry player reached a class action settlement, but the settlement was rejected by the judge due to administrative reasons, like a high attorney’s fee and failing to identify and paying affected class members. In 2019, the state of Arizona sued an arcade machine distribution company, Betson Coin-Op, over the Sega Key Master machines and how they’re programmed. Attorney General Mark Brnovich said that system made the game more like a slot machine, which is only allowed in licensed casinos in Arizona.

Previously, Arizona had prosecuted a criminal case against Jonathan Sanborn, who licensed Key Master machines from Betson for two years, set to only allow players to win after 2,200 losses. In that case, Betson settled for $1 million and agreed not to sell or lease Key Master machines in Arizona.

A screenshot of a manual from the lawsuit

Image: Marcelo Muto via class action complaint

Key Master is no longer listed on the Sega Amusements website; instead, it’s been re-named Prize Locker. It’s the same design, but it’s 100% skill-based, Sega said on the website. In the lawsuit, Muto’s lawyers said Prize Locker and the conversion kit (which “allows an operator of a Key Master game to convert the game” to a skill-based one) are offered because Sega itself has realized that “many areas of the world aren’t able to benefit from this outstanding category [of arcade game] due to local or state regulations prohibiting their operation.” Lawyers alleged that this is Sega “tacitly conced[ing] that Key Master is rigged.

Though Key Master is no longer officially available on the Sega Amusements website, there are still machines in circulation. Key Master is still listed on the Komuse website.

“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,” the lawyers wrote. “This refusal, and continued marketing of the Key Master Machines as games of skill, only serve the profit interests of Defendants.”

Neither Sega, Sega Amusements, nor Komuse have responded to Stock Market Pioneer’s request for comment.

The proposed class action lawsuit is looking for Sega, Sega Amusements, and Komuse to disclose on Key Master machines that they aren’t necessarily games of skill, and to pay $5 million in damages for “misleading consumers.”

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