"The arcade needs people to win sometimes. Not often, but enough to maintain the hope."
It also depends on the purpose of the arcade.
Bear in mind most of them buy plushies (the soft toys) in bulk, and get 2-5 for a buck.
Once you've spent more than a fiver (or less if it's a kid) you can usually ask and they'll give you one. Revealing the magic switch is considered a no-no.
I don't really get how this is news. Next there will be shock that carnie games are rigged, those six cans aren't all the same weight, the darts are blunt, and the games are easiest at the start of the day, so people walk around with the big prizes.
Other news, water confirmed as being wet.
The ones in Vegas, much like the arcade machines, are set on the most easy, generous settings. So the parents can give the kids a bucket of quarters and use the casino arcade as daycare while they gamble. Not compaining, 11 year old me got to complete TMNT and Streets of Rage, which was pretty sweet.