And one more update - I saw that EmulationStation uses this to fire up area51 via retroarch:
/usr/bin/retroarch -L /usr/lib/libretro/mame0139_libretro.so --config /recalbox/share/system/configs/retroarch/retroarchcustom.cfg /recalbox/share/roms/mame/area51.zip
When I launch retroarch like this via the commanline then the game starts.
However when started via EmulationStation the screen just goes black and then a couple of seconds later ES is back.
Odd...