What would be the legality of this business idea?

I’m pretty sure I already know the answer, but what the heck I’ll ask anyways. Maybe someone here will know a way to make it work.

I’ve had the idea for some time of opening up a type of like restaurant/bar/chill atmosphere that has a variety of vintage video games for customers to play (old SNES, Sega, Arcade games, etc, etc). The idea kind of being you could set up like booths with an individual “system” set up at them (built into the booth) so that you and your party could play video games, have some drinks and relax, and also have an old school style arcade. The idea being to target people who grew up in my generation and around my generation, who remember the old style arcades but are grown up now.

When I first had the idea (about a year ago) I based it on actually buying old school games in their original form. This is definitely doable, but it’s expensive. The really good vintage games cost an arm and a leg, many of them are beat up and damaged, repair is expensive. Arcade games alone can cost you hundreds of dollars for even the beat up and not that popular titles, let alone the high cost of your popular games like the Simpsons or Pac Man. That cost and work basically sank the idea.

Then I built this over the course of 4 months earlier this year.

http://imageshack.us/photo/my-images/685/arcadefinal.jpg/
http://imageshack.us/photo/my-images/196/imag0581o.jpg/

I found basic plans for the cabinet on the internet, and tweaked them a bit (yay cup holders), and then built it from scratch. I have basically zero training in wood working, had to buy most of the tools, and did most of the work in my apartments living room…. the games, and there are thousands of them, literally any game you’ve ever wanted to play.. are off of MAME/emulator technology. This cabinet also plays console games like on the NES.

My total out of pocket cost, including 300ish dollars on tools…. probably around $800.

So the thought occurred to me, that I could bypass the cost and difficulty of finding the actual vintage games, and just make them via emulator technology. It would be far easier to install a computer and some generic controllers into restaurant booths then jimmy several game systems to the booth, or be stuck with one game system per booth. Arcade games that cost thousands of dollars could be bypassed by making several arcade cabinets that play every arcade game anyone would ever want to play.

But herein lies the problem. The games themselves are all pirated from the internet. Very few are actually open source or up for sale by their developers, even though the vast majority of the games in question here haven’t been produced by their creators in at least a decade. I’m pretty much 100% sure it’s illegal for me to charge people to play those games. But would it be illegal for me to offer them for free and just charge for drinks or maybe entry into the establishment? Basically, would the mere playing of these games be illegal based on how they were created?

What do you guys think?