When the key is in the start (NOT run) position, the automotive gauge/sending unit on the auto engine in your boat is switched into what's called "prove out" where all gauges and indicators turn on or go to max. It's supposed to show you that all the gauges are functioning, pre computer days
It is working properly. So is the gauge. The sending unit may not be correct for the oil pressure that your engine puts out, there are basically two replacement sending units. 0-80 psi, 0-120 psi. Both are rated at 250psi, so it's just an accuracy thing. It's only real function is to tell you when you don't have oil pressure. Most boats have a HV/HP oil pump, so they take the 0-120 psi sender. It is available from Overtons for 20$ (thanks Shawn!)