As you posted, charging or making a profit from a Mame cab is plainly wrong and has you frustrated.
From the remainder of your post, it appears that you are unfamiliar with the Mame license with regard to commercial or public settings:
This is clearly covered
here .
To quote from the FAQ:
Q. Can I put an arcade cabinet running MAME in a public location?
A. No. This this a commercial use of MAME and is prohibited by the license. Even if you don't charge money, putting a machine in a public location is "operating" an arcade machine and falls under commercial rules in most locations.
Q. Can my non-profit use MAME or an arcade cabinet running MAME to help raise money?
A. No, sorry. Even for the most worthwhile cause, this still is a commercial use of MAME and is prohibited by the license.
Q. How do I obtain a license to the MAME source code?
A. You can't. See the Copyright section above.
It looks like hypothetical Mame cabinets must remain in hypothetical basements.
If your hypothetical bar owning friends had a hypothetical office or a hypothetical area not open to the public in said hypothetical bar, then it's less clear. Perhaps someone with some hypothetical legal training will comment.
Anyhow, happy gaming! (just not Mame gaming in hypothetical

public places)
