New York mayor Fiorello La Guardia was responsible for the ban, believing that it robbed school children of their hard earned nickels and dimes. Pinball was banned beginning in the early 1940s until 1976 in New York City.
Keeping this in view, why is pinball illegal? Older pinball machines are expensive due to their rarity and collect-ability.
Pinball machines are expensive because there are very few surviving machine manufacturers due to the game declining in popularity and the steep costs involved in the design, technology, production and licensing of the machines.