Located on the basement floor of Excalibur Hotel and surrounding the entrance to the Tournament of Kings show, the Fun Dungeon is a pretty nice arcade for all ages. There is a specific section within the area for younger children which my 4 year old loves. This section includes a mini-carousel, stationary car rides filled with fun lights and sounds, and multiple games where tickets could be won to be exchanged for nice prizes.
My daughter loves venturing inside "the castle" where the princesses live. We spend an hour at the arcade/fun dungeon and I somehow always walk away with the best prizes. There are carnival style games where you can win giant stuffed animals or play fun games like air hockey and even billiards. If you're into laser tag, they have that too!
There is a rocket ship game right in front of the elevators and near the ticket/prize redemption section. This is the EASIEST way to win tickets 200 at a time. Just learn the timing when you drop the quarters and make it rain with tickets at the prize booth!
Many people here in Vegas still don't even know this place exists when I mention it and it's really such a shame considering how much fun your child will have here! If you're near the area with some time to spare, do your kid(s) a favor and enjoy some fun in the dungeon!