HOW DO YOU GET A PERSON TO FEED MONEY INTO A DEVICE that serves no function but to give only some of it back? Slot-machine designers have always had an intuitive grasp of the arts of both P. T. Barnum and B. F. Skinner, mixing two parts sucker appeal with one part operant conditioning. Their devices have been caressed and kicked, prayed to, execrated, and suspected of malign intelligence. They have soaked up billions in profits and attracted a century of legal suppression. But hate them as we may, we can’t stop playing them.
After 1870 the cash register, typewriter, adding machine, and telephone began to make their impact on daily life. Why couldn’t machines likewise bring convenience and efficiency to gambling? In 1877 Edward J. McLoughlin patented an “Improvement in Toy Money-Boxes.” A customer chose a number and inserted a coin, then spun a pointer on the small countertop device. An attendant—the bartender or store owner—paid the winner. Other gambling inventions hit the market in succeeding years: the “Eureka Box,” the “Investor,” the “Perhaps,” the 3-for-l Slot Machine. They let players spin a disk or drop coins down through an obstacle course of pegs. Usually, the machines enjoyed a craze, then fell into obscurity.
In San Francisco, where a robust tradition of gambling survived from gold-rush days, the possibilities of mechanizing luck enticed a number of inventors, mostly German immigrants. In 1893 a machinist there named Gustav F. W. Schultze invented a countertop device that accepted a nickel and spun a color-wheel disk. When the disk stopped, a notch in a star wheel on the same spindle determined the payout, if any. Schultze constructed a slide to cut the right number of coins from a stack and let them fall into a cup where the player could retrieve them. This automatic payout freed the attendant, beguiled the player, and launched an industry.
The late 1890s ushered in wave after wave of increasingly elaborate slot machines more or less patterned on Schultze’s, and after he lost a patentinfringement case, the shameless pirating of rivals’ ideas became an industry tradition. The machines grew into freestanding consoles, their spinning colored wheels standard fixtures in saloons. Most were driven by a clockwork of springs, cams, and levers. A few used batteries to operate solenoids that controlled the payout, but these proved unreliable. Electricity would not re-enter slot-machine technology for decades.
A colleague of Schultze, the Bavarian-born San Franciscan Charles Fey, became the Thomas Edison of slots. During the 1890s Fey was building automatic-payout wheel machines like others on the market when he added the innovation of having three wheels instead of one. Sometime around the turn of the century he changed the orientation of the disks, turning them into reels that flashed symbols of playing cards past a window. He called the device the “Card Bell.” If the reels stopped on a winning combination, the machine would automatically pay between 2 and 20 coins.
Fey rigged his reels to stop in sequence, first one, then another, then the last, drawing out the moment of decision. Players loved the brief suspense. The three reels, each with 10 symbols, yielded 1,000 possible combinations (10 times 10 times 10), many more than were available on wheel machines. The greater number of potential prizes excited customers and not incidentally made it impossible to easily calculate the odds of winning. Soon afterward Fey constructed a similar machine, the “Liberty Bell,” substituting simple symbols—hearts, diamonds, horseshoes—for the playing cards. Bell would afterward serve as a generic term for the standard three-reel-based devices that became the archetype of the slot machine.
Fey’s creation performed several tasks simultaneously. When a player inserted a nickel and pulled the handle, the machine detected the coin, spun the reels, and selected their resting place at random, using arms that clicked into the notches of star wheels. Mechanical fingers sensed the reels’ positions and used slides like Schultze’s to eject the proper number of coins (the random combination of symbols resulted in a payout of 75.6 percent of the money played). A springdriven clock coordinated the multiple functions. The machine then automatically reset itself for the next pull. Many variations on the slot machine came and went over the years, but the bell machine, incorporating Fey’s basic mechanism, dominated the market for more than half a century.
The man who turned Fey’s invention into a gold mine was Herbert S. Mills. Mills was the son of a maker of railroad crossing gates with a sideline in coin machines. When he took over the family firm in 1897, he changed the name to Mills Novelty Company and focused on slots. By 1910 Mills Novelty was the industry giant, with an eight-story manufacturing plant in Chicago.
The “Owl,” which Mills began selling in 1898, grabbed a solid portion of the market for the then-popular freestanding machines, wheel games housed in ornate oak cabinets with nickel-plated trim. “If it stops on a winning number,” the San Francisco Morning Call reported that year, “the machine, actuated by some hidden mechanism, which is almost human in its intelligence, performs the operation technically known in the argot of the saloons as ‘coughing it up.’”
Mills pushed slots into new territories by lowering prices and increasing reliability. The company replaced cast-iron parts with stamped steel for greater durability and more rapid production. Much of the evolution of the technology, though, was aimed at subterfuge. The legal waters were murky from the beginning. The machines made a highly visible target, and they suffered a particular stigma because they democratized gambling; anyone with a nickel could play, no skill required. The lower classes, in the view of reformers, needed to be protected from themselves. As early as 1893 demands arose to suppress nickel-in-theslot machines as illegal lotteries. The big floor models, which could take up to three dollars on each pull of the handle, sparked periodic crackdowns. Some states banned them across the board. For years manufacturers, operators, politicians, and police engaged in complicated chess games over the letter of the law, with the issue often decided by a strategic bribe.
One of the most popular ways to maintain a toehold in legality became the sale of a pack of gum with each pull of the handle. In theory the candy dispenser took the machine out of the realm of pure gambling device, though many players passed up the gum.
In 1906 Mills Novelty issued its own “Liberty Bell,” an improvement on Fey’s machine. Three years later the company introduced the “Liberty Bell Gum Fruit,” which, to dilute the association with gambling, changed the symbols on the reels to images of fruits, the flavors of gum available. Mills’s “Operators Bell” did not sell gum but established the fruit symbols—lemon, orange, plum, and cherry—as the industry standard. The biggest prize came when three Bell Fruit Gum labels were lined up. These would evolve into the three bars that traditionally signified a jackpot.
The Mills machines expanded the reels to 20 symbols apiece. Designers lengthened the window covering the reels so the player could see three lines of symbols. The resulting near-miss factor enticed customers to keep playing and became a feature of all slots.
Now the machines spread to places like cigar stands, restaurants, drugstores, and soda fountains. “Practically every corner in the more popular business sections of this city is decorated with a slot machine,” a San Francisco paper noted in 1909. But as their use expanded, the battle over their legality heated up.
The manufacturers fought back by turning the machines into “trade stimulators.” They eliminated the coin payout and substituted tokens theoretically redeemable for merchandise—a drink or a free cigar—but often used as cash equivalents. The sidemounted gum dispenser was replaced by a mintvending device, which was built into the front, further camouflaging the gambling function for “marginal” territories. Slots were designed to “sell” everything from golf balls to pencils to cigarettes and were disguised as music boxes, beer barrels, strength testers, clocks, and radios. The payout was designated “profit sharing” rather than a prize. “Skill” elements were added, such as buttons that let the player try to stop the reel on a particular symbol. The machines were miniaturized so that a proprietor could whip them off the counter at the first sight of the law.
Around 1917 Mills and another leading manufacturer, Watling, each offered an “O.K. Operators Bell,” a machine supposed to be okay with the law in all territories, no matter how tight the local regulations. It could sell gum, pay in trade checks, or tell fortunes. It employed “future pay,” dropping the player’s winnings into an inaccessible receptacle to be released only on the next pull of the handle. Since the player always knew exactly what he would get back, he was obviously not gambling. Reform-minded legislators were left scratching their heads.
By 1920 alcohol had fallen victim to these same reformers’ wrath, threatening the slots’ most popular locations. But the operators of speakeasies lost little sleep over the fine points of gambling laws. As illicit watering holes proliferated, slot sales burgeoned.
The slots were a natural during the go-for-broke twenties. Many nickel machines were revamped to take quarters and half-dollars, and the first silver-dollar bell machine appeared in 1929. The decade also brought a pivotal innovation in the machines’ technology, the jackpot. The idea went back to the simple machines of the 1890s and had been tried from time to time since. The coins accumulated behind glass, providing tantalizing bait for players. When the three bars came up, the machines spilled out a thrilling little bonanza in addition to the traditional 20-coin prize. By the time of the stock market crash, machines that didn’t offer jackpots were obsolete.
The Depression failed to dampen the business, and sales peaked in 1932, as hard times fueled dreams of winning.
Struggling merchants, who split the machines’ take with their distributors, often found the extra $25 or $50 a week a means of staying solvent. “It’s the greatest instrument of optimism that was ever developed,” Mills boasted of one of its 1933 machines, “… full of promise, fascination, hope, and LIFE .”
During Prohibition, though, the public had begun to associate slots with the underworld. They came to be seen as a racket controlled by a sinister syndicate. In a 1932 Fortune magazine profile of Mills Novelty titled “Plums, Cherries, and Murder,” the editors warned that “big-time racketeers are pressing more and more eagerly into this rich territory.”
All those nickels did attract criminals. In the early 1930s, the mobster Frank Costello controlled more than 7,000 of the estimated 25,000 slots in New York City. Government’s answer was to pass even more draconian laws and to use slot machines as photo opportunities for sledgehammerwielding politicians. Earl Warren, future Chief Justice of the United States, built his reputation on his implacable opposition to California’s slot machines; in New York, Mayor Fiorello La Guardia, with the press in tow, floated a barge full of slots into Long Island Sound in October 1934 and consigned more than 1,000 of them to the deep.
World War II put the industry on hold as manufacturers turned their machining skills to armament production. The subsequent peace and prosperity brought a resurgence of slots, but as Marshall Fey points out in his historical survey Slot Machines , they “continued to operate in the twilight zone of the law.” Then the ax fell.
Up until midcentury, states and municipalities had fought a losing war against slots. Manufacturers had sold them openly as local officials struggled to curb them. The Johnson Act, signed by President Truman in 1951, attacked the machines at their source, prohibiting their interstate shipment except to locations where they were strictly legal, which meant only Nevada, part of Idaho, and a few counties in Maryland. For the slot-machine industry it was a staggering blow.
But hardly a knockout. Postwar America was a mobile society; if the slots couldn’t come to the players, the players would travel to the slots. Nevada had offered legal gambling for twenty years. Harold’s Club in Reno became one of the first casinos to aggressively promote its slot machines. By the 1950s the club had boosted the payout to 88 percent and offered bigger jackpots; players responded by feeding the machines for hours on end. Casino operators began to love the slots’ predictable returns and low labor costs, and the machines began to evolve to suit the casinos’ needs. They grew flashier, with lighted cases and lurid graphics. They became front-opening so they could be packed together more closely and serviced with ease.
By the early 1960s the mechanical bell device, so long the definitive design, had had its day. Some firms had been offering electric-motor-driven slots as early as 1930, but players had long resisted innovation; they liked the feel of the traditional mechanisms. In 1963 the Bally Manufacturing Company, a producer of pinball and arcade games, introduced an electric slot machine with the mellifluous name “Money Honey.” Gone were the slides that had always controlled the payout. The Money Honey incorporated a large hopper with an electric coin counter. Electromechanical sensors let the machine detect more than 50 payout combinations and disgorge large jackpots.
Slot designers quickly took advantage of the possibilities the new technology offered. The machines could pay for symbols on any of the three visible lines or for diagonal matchups, giving players many more ways to win. “Multiplier” machines let the players increase their payouts by inserting more than one coin, a revival of a concept that had flourished in the 1890s.
Bally came to dominate the market during the sixties as many of the oldline manufacturers faded away. But at the edges of the industry, small companies were experimenting with even more radical changes in technology. The first solid-state machine, based on motor drives and solenoid stops, appeared in 1966. In 1975 video versions of the traditional three-reel slot found a niche as novelty machines in the market. Little by little these ideas won acceptance from players.
The 1978 advent of gambling in Atlantic City gave the industry a boost, and New Jersey regulations encouraged competition by requiring casinos to purchase no more than half their slot machines from a single manufacturer. But a man named William S. (“Si”) Redd did the most to usher in the modern age of slots. While working as a Bally salesman and distributor in Nevada, Redd also made and distributed novelty machines, including Brobdingnagian promotional slots like “Big Bertha” and several versions of the incipient video games. When he sold his distributing company to Bally in 1975, he held on to the novelty portion. It was a prescient move.
Throughout the seventies, logic cards and integrated circuits took over from wiring, switches, and relays. At the same time, casinos grew increasingly dependent on slots. By 1983 the machines were contributing more than half of all casino revenues. Casino managers found that higher payouts with frequent small jackpots would boost their handle, and the more and more popular dollar machines came to offer as much as a 97.5 percent return. Truckloads of silver dollars had to be shipped to Nevada to handle the action.
In 1981 Redd took his company public, changing its name to International Game Technology. Its line of solid-state slots put it into a highstakes duel with Bally, a contest in which it held an ace in the hole. IGT enjoyed a monopoly on video poker machines, which became the industry sensation of the decade. The element of skill, combined with frequent wins, mesmerized players. The devices helped establish IGT as the leading slotmachine manufacturer in the world.
In the mid-eighties IGT adopted an innovation that stood the basic concept of the slot machine on its head. The spinning reels had, since Charlie Fey’s “Card Bell,” been the means of randomly determining the prizes a machine paid out. The IGT machines used a computer to generate random numbers, which decided the payout instantaneously. A stepper motor, informed by an optic sensor, then deliberately stopped the reels at positions the microprocessor had already chosen. The technology left the reels as a mere artifact of the machines’ history.
A 1930s reporter had described slot machines as “cash registers dressed up for a circus.” Today they are the apotheosis of glitz. Lights flash. Sound cards generate music or replicate the sound of long-gone machinery. Video displays decorate their fronts. They offer themes ranging from Elvis Presley to “Jeopardy.” The popular “game within a game” feature gives the player a second and third chance to win. Multigame video machines offer everything from blackjack to instant lotteries on one screen.
The handle that always distinguished the “one-armed bandit” has long since become a vestigial limb; a push of a button is all that’s needed. The idea of “free play” does away with coins regularly tumbling into the payout cup; players accumulate credits and just keep playing. Meanwhile, the jackpots have grown to gargantuan proportions. Slot machines linked electronically across an entire region have resulted in mega jackpots exceeding $27 million, potentially available to anyone on a single play.
Slot machines in Nevada casinos alone take in close to $6 billion a year. They represent as much as 74 percent of a gambling operation’s revenues, dwarfing the take from the traditional table games. Today they are spreading outside the gambling halls; manufacturers hope the day is not far off when they will return to bars. As a 1931 Mills flier said, “Who can resist them?”