Many early designs used what was either easily available or the most cost effective.

An electro isn't really suitable in this application but most other types could have been used and in fact could be subbed in if needed.

Both stability and tolerance.

Back in 'those' days - both electrolytics and ceramics had terrible tolerances and could be off as much as +80%.
Mylars were and still are commonly in the 5 to 10% range.

Ceramics could be bought in this tighter tolerance but back in 1970/1980s, they were terribly expensive.
Today's ceramics have improved tremendously in both stability and tolerance and good ones such as COG/NPOs can be used. But these will cost you more than a simple mylar for that value.

Electrolytics still have terrible tolerances and are not meant for use in such timing circuits. And not many sources for electrolytics in that small of a value anyways.

I'm researching this right now and came across this thread. I'm pretty sure Brentd27 is correct. I was present in the lab when these parts were selected but at 21 fresh out of school I didn't know enough to ask why that type of cap was selected. It had to do with tolerance, availability, and price.

If you hold a class Z ceramic, or whatever the cheapest most basic type, the capacitance value starts to drift pretty substantially just from the heat of your hand.

That said I experimented with a cheap X7R 50v ceramic by samsung at C16 and the display interrupt speed did not drift much (15-20hz I think it was) even at the extreme ends of temp that these games would be operated at. The display interrupt does not have to be too precise except maybe in a couple of the really busy games like Mr/Mrs pac you find a sweet spot for the display interrupt or else lamps and displays flicker. Even then you have at least a 20hz window which would be within the worst case tolerance when using an X7R in what I tested.

Caps have probably got a lot better since the late 70s. If bally built that circuit now-a-days I figure a NP0 or C0G type would be specified there instead of the poly chicklet looking cap.