Have you ever considered actually how many people games online? It is a pretty hefty number, closer to 200 million people seem to be playing one or more games when they are online. Of course there are many marketing and advertising folks wanting to reach those people.
You can place ad where ever you please in the game. Level Changes are the best places that I have seen adds appear on most online game sites.
There are some restrictions at the time and eligible publishers must have a minimum of 500,000 game plays per day and have 80% of their traffic from the U.S. or the U.K. If you're interested in becoming a AdSense for games beta publisher, feel free to review our complete list of requirements and submit an application. More information is available at games site.
Inside AdSense: Get in the game with AdSense for Games