I'm thinking of setting up a games room in my house, and I'm trying to
find out where I can buy coin operated arcade games from in the UK

things like old fruit machine games and arcade games (the ultimate
would be an original mortal Kombat arcade machine).

what happens to all the old machines and where can a member of the public get them?

Hi
I would suggest looking on ebay there are usually quite a few arcade
games for sale there.
If not have a look at http://www.arcadewarehouse.com who are based near Leeds.
Cheers
JD