The History of The Slot Machine

Walk into any casino on earth and you will instantly recognize the importance of the slot machine, popularly known as “fruit machines” in Britain, “buggies” in Scotland, and “pokies” Down Under. Whatever you call them, they almost invariably appear front and centre, forcing customers to confront them coming and going.

The same holds true in today’s online casinos. The reason for their prominence is obvious:  people love playing online slots because it’s easy to get into and requires no prior knowledge, while still with the possibility to win handsome wads of cash. So while casinos are traditionally associated with card and table games like blackjack and roulette, in reality, the game that gets played the most is slots.

How did this happen? Slot machines are not from ancient history but from a boom period at the end of the 19th century America, where an economic boom led to more disposable income, a loosening of Victorian morals, a boom in places of entertainment, and a readiness to wager.

1889-1894: Humble Origins of the Slot

“Nickel-in-the-slot” vending machines were introduced in the late 19th century in the United States, but used for dispensing candy or other novelty items, or operating races of toy horses or other games. Closer to the gambling concept were games in which a coin deposited into a slot would fall onto a platform or scale piled high with other coins, potentially causing other coins to fall off.

Card games, of course, had been around for a long time, with poker at the head of the pack. The simplest and most familiar from of poker was five-card draw. The drawback of the game, of course, was that you always had to find some partners with whom to play. However, the company of Sittman and Pitt in Brooklyn came up with the idea of a mechanised poker game you could play alone. They took the number-cards and face-cards of a deck and placed their symbols on rotating drums. To start the game, you inserted a nickel into a slot and then pulled a lever on the side to spin the drum reels.

When the reels stopped spinning, the “card values” displayed on the center row – the payline — was evaluated like a poker hand, with prizes awarded for winning combinations like two or three in row, flush, straight, etc. The manufacturer typically removed certain cards –typically the jack of hearts and the 10 of spades — making it harder to achieve high paying wins like a royal straight flush, tilting the odds in favor of “the house”.

The problem with these early poker slot machines was that they did not dispense winnings. The possible combinations of winning poker hands were too many to reduce to a manageable payout. So the host establishment, usually a saloon or men’s club, had to “manually” evaluate the win and then dispense free drinks, free cigars or other in-kind rewards for winning spins.

1895-1901: Origins and Rise of the “Bell” Slot Machine

Around the same time, on the other side of America – some say a few years before, some say a few years later – Bavarian immigrant Charles Fey came up with a better approach. He cut the number of spinning reels from 5 to 3 and simplified the numbers of symbols in play to just five — diamonds, hearts, spades, horseshoes and a liberty bell. This reduced the number of winning combinations and made it possible to directly dispense coins for winning spins.

Fey is also credited with being the inventor of the first slot machine security mechanism. Players had initially discovered that it was possible to cheat the machine by depositing fake coins (famously, wooden nickels). Fey therefore invented the first currency detecting pin, which differentiated between real coins and fake ones.

1902-1915: Slot Machines Begin to be Banned, and Copied

The spectacular success of the Bell slot machine led some states to ban the “one armed bandits.” Defenders of public morality and the clergy arose in righteous indignation in locality after locality. Manufacturers therefore removed the coin slots and the payout mechanisms, forcing transactions for operating the machines to be over, or more likely under, the bar counter.

However, the Liberty Bell maker and its imitators continued to be manufactured and distributed to localities where the machines remained legal. Mother Nature, however, had other plans for the manufacturing plant of Charles Fey, which was leveled by the Great San Francisco Earthquake of 1906. Fey’s company was devastated, and most of his stock destroyed, but his legacy lived on.

Herbert Mills, a maker of novelties from Chicago, reportedly joined forces with Bell and introduced assembly-line production to the manufacture of slot machines, earning for himself the moniker of being “the Henry Ford of slots”. The Mills Liberty Bell slot machine initially featured a bell that rung whenever a winning combination was displayed, a feature that would later be added to many casino slots.

While there were apparently some editions of the machine which dispensed actual chewing gum and sweets, this appearance was just a ruse to allow their legal manufacture. Instead of card symbols, the reels displayed symbols of fruit. This is the origin of the name “fruit machine”. The machine also depicted chewing gum with three horizontal lines, later stylised into the common slot machine symbol known as BAR.

1916-1919: The World’s First Jackpot and More Expansion

The Mills Novelty Company also is credited with inventing the “jackpot” in 1916, designed so the machines, when triggered by certain combinations of images on the payline of the reels, spilt out a massive quantity of coins accumulated in the machine, accompanying the happy events with the sound of bells. Those sounds were echoing throughout Europe as well. Before the outbreak of World War One broke out, the company had expanded into Europe with factories there manufacturing up to 30,000 slot machines.

Even legal or political complications did not slow down innovation in the slot machine industry. Cast iron machines were replaced with cheaper, lightweight, wooden cabinets, and game play was improved to allow a double jackpot, assuring players on a lucky streak that they could win two big prizes in quick succession. The new machines were designed to be quieter, earning them the nickname of “Silent Bells.” The late models also featured coin acceptor, which showed the coins played moving in a row across the top of the machine, revealing the use of any slugs and encouraging play by the additional movement.

1919-1963: Gambling Goes Underground in the US, Except Vegas, and Emerges in Europe

During the 1920s, despite the Era of Prohibition, which outlawed the sale of alcoholic beverages in the United States, slot machines grew in popularity throughout much of the US, especially in resort areas, and continued even in during the Great Depression of the 1930s. Slot machines often appeared in the outlawed Speakeasies. Since these places were violating the law anyway, there was little additional risk offering cash-dispensing slot machines.

But control of the distribution of slots by organised crime led to increasing legislation to restrict their sale, transport, and use outside private social clubs. Only Nevada re-legalised gambling in 1931: slots were legally banned virtually everywhere else in the US, although enforcement was spotty.  Despite anti-gaming legislation and occasional governmental crackdowns, the gaming industry continued to boom, with Nevada serving as a magnet for manufacturers as well as players. The manufacture and enjoyment of slots increased exponentially.

After World War II, especially in Europe and Down Under, slot machines suddenly returned to worldwide popularity as governments sought new sources of tax revenue. In 1988, slot machines were permitted in French casinos, ending a 50-year ban.

1964-1977: The first Fully Electronic Slot, Bottomless Coin Dispensers, and Video Slots

Electrical components had been incorporated into slots since the 1950s, when innovations like coin multipliers allowed players to electronically increase the value of their bets and thus potential winnings. However, in 1964, the Bally company – then a manufacturer of pinball machines – introduced the first fully electromechanical slot incorporating predecessors of the modern microprocessor. It was called Money Honey, with reels operated entirely by electrical means. Nevertheless, the game was still begun by pulling a lever, perpetuating for the player at least an illusion of control over the outcome of the spinning reels. In pinball game style, they also allowed players to “hold” reels for the next spin, or “nudge” reels to try forming more lucrative combinations.

The big winners were the manufacturers of these machines along with the casinos and operators, which hosted them. They benefitted because the new slots, relying on computer algorithms rather physical mechanisms, were more secure and harder to cheat, thus more reliably profitable. These electronic machines also were the first to feature a bottomless hopper, enabling automatic dispensing of an unprecedented payout of up to 500 coins. Electronic slots started replacing their mechanical ancestors. Eventually, even the mechanical arms would be replaced with buttons.  In 1970, Bally introduced machines which worked with Dollar Coins, further attracting customers.

Walter Freely was an inventor who came up with the idea of combining an automated poker machine with a computer-controlled video monitor, and then extended the idea to slot machines. The Nevada company Fortune Coin in 1976 introduced the first video slot and deployed it in the Las Vegas Hilton. After cheat-proofing, it won approval of the Nevada State Gaming Commission and rapidly became a mainstay of the Vegas Strip.  With the introduction of video, graphics and sounds also began to be upgraded, and symbols began to depict heroes from films and other popular culture characters.

1978-1985: Gambling is Legalised in Atlantic City and the RNG Transforms Gaming

By the time Atlantic City legalized gambling in 1978, Bally had gone from a maker of pinball games to the manufacturer of the lion’s shared of slot machines in the US. The company continued to innovate with more reels, more symbols, and allowing larger wagers.  Bally also hired Inge Telnaus, a computer programmer, tasking him to increase the size of the jackpots without losing profits for the company.

The problem with electronic slot machines up to that point was that the jackpots they produced were limited by the number of reels and symbols they employed. But more reels and symbols discouraged players, reminding them of how unlikely were their chances of winning. In 1984, Telnaes’ came up with a solution, protected by US Patent, calling for slot machine results to be determined by random-number generator, rather than reels.

Telnaus’ RNG enabled game developers to have total control over the odds and effectively ushering in a gold rush for what would be the online gaming industry. The gaming giant IGT wisely purchased his patent in 1989, ensuring for itself a stream of royalties from use of RNG by all game makers.

1986-1995: The Introduction of Linked Slot Super Jackpots and Opening of New Slot Markets

In 1986, electronic systems were introduced at leading casinos to connect large numbers slot machines in various locations to permit a small fraction of each inserted coin to contribute to the growth of a collective “super jackpot” which could grow to an extremely large amount before being won by the appearance of a rare combination of one symbols played on one of the machines in the network.

As gambling laws were relaxed at the end of the 20th century to allow legal gambling on Native American reservations and to expand the revenue-generating options of many U.S. states, the number of electronic gaming machines (which came to include video poker machines as well as modern slot machines) grew significantly.

1996-2004: Slots Go Online with Second-Screen Bonus Rounds and other Innovations

WMS in 1996 released “Reel ‘Em”, the first video slot to showcase a bonus round with a second screen. When a combination of symbols triggered a bonus round was triggered, a completely different set of reels was displayed, with additional prizes to be won.

Slots with unconventional reel configurations also started popping up. Many new layouts emerged, some with up to seven reels, other with configurations which didn’t even resemble reels. A diversity of themes sprung to life, with endless varieties of symbols to be found, along with innovative scatter symbols, wilds, and bonus features.

Jackpots kept rising. In 2003, a Las Vegas slot machine which was part of such a system paid out a super jackpot equivalent to more than 30 million pounds sterling

2005-2009: Hybrid Slots Become the Norm, and the US Bans Online Gambling

Even in Land-Based Casinos, computerised techniques gave rise to machines which retained some physical aspects of classic lever-pulled slots but have internal components which add the game play and security features of electronic games.

In 2006, the United States passed the Unlawful Internet Gambling Enforcement Act, prohibiting U.S. banks and financial institutions from doing business with online gambling companies. Whilst physical slot machines previously were legal only in state-sanctioned casinos, local governments and the reservations of Native Americans began allowing bars, restaurants and casinos to offer slots to patrons.  And the prohibition of gambling in the US did not slow the proliferation of slots elsewhere.

2010-2017: Online and Mobile Slots Keep Proliferating, Overtaking Terrestial Slots

The quantity of slot developers and video slot games grows year after year. Whilst there are relatively few manufacturers of terrestrial slots, there are more than one hundred online slot developers and more than 2000 different slot games. Huge games aggregators like Microgaming and Playtech gobble up smaller studios to strengthen their portfolios and fuel innovation, delivering comprehensive white label solutions for casino to market to punters.

The electronics of modern slot machines and online slots can be set to any frequency of payouts, and games vary greatly in their average RTP or return to player. The house advantage and vary widely, from 4% to as much as 50%. Slot machines and online slots are by far the biggest generator of profits for most casinos, terrestrial or online, averaging 30 to 50 percent or more of total revenue. By 2012, the UK reported income of 5 billion pounds sterling from slots alone, and that number continues to grow steadily by all accounts.

Progressive slot games have become a particularly active hotspot. These games pool together slots in multiple locations, accumulating jackpots to be dispensed to a lucky player every few weeks. Cash Splash from Microgaming is widely credited as being the first progressive jackpot but its relatively modest jackpots have been dwarfed by jackpots of like Mega Moolah and Mega Fortune, which regularly deliver eye-popping winning prizes to ultra-lucky punters exceeding 15 million pounds each.

The advent of mobile devices has further fueled innovation in online slot games. Instead of requiring the download of games, on the go games play on a handy instantly. The use of Flash animation, which did not play on Apple devices, is giving way to games programmed in HTML5, which works on virtually every device without downloading.