Any chance you have multiple USB mice connected to your machine (other spinners, trackballs, normal mice, etc.)? Since the mouse works fine in Windows I'm guessing perhaps you need to go into the mame settings (in-game) and make sure the mouse settings are set to use the mouse you want to use (in this case, your spinner). You can do this by highlighting the correct entry, hitting enter, and then spinning your spinner.
Good luck.