The Past, Present, and Future of Slot Machines

By Beverly Greer in Blog
| July 28, 2019 8:10 am PDT

I love that first moment when you walk into a casino when the atmosphere just immediately overwhelms your senses.

The lights, sounds, smells, and energy in a casino are unlike any other place in the world, especially as you walk between the rows and rows of slot machines on either side of the aisle. Slot machines are designed to make you feel like a winner, with their flashing lights, catchy sounds, and pop culture references.

But they were not always like that.

Original slot machines didn’t use electricity, so the flashing lights and sounds that we are accustomed to today were not even possible when they were first invented.

Instead, they were simple machines that used levers and springs to spin reels with simple symbols on them.

Did you know that slot machine is an abbreviation for “nickel-in-the-slot machine”? (Click here for more information on where other casino games get their names.) Or that the original prize was usually a drink at the bar instead of coins, tokens, or chips?

Slot machines have certainly come a long way since they were first invented, but they are now facing a new era of change.

Millennial gamblers are adults who grew up playing video games and games on the internet, and the simple slot machines are not able to hold their interest.

Why would they play a simple game where they push the same button or pull the same lever repeatedly while hoping for a different outcome? Especially when you consider the fact that they can build worlds, fight wars, and race cars on their PlayStation or X-box anytime they want to.

Casino operators have been noticing the anti-slot machine trend for many years, so they knew that they had to do something about it. Game developers are working on creating new types of slot machines that require problem-solving skills and can be played with other people.

Let’s take a look at how slot machines have evolved over the years and what the newest generation of gambling device will look like.

The History of Slot Machines

Slot machines were first invented in the late 1800s, but their design changed several times over the next decade. As they became more popular, they also became more regulated because clergymen and lawmakers were strongly opposed to gambling of any kind.

They got reinvented again in the late 1980s to become the electronic machines that we are used to today.

Here is a brief description of the history of slot machines.

The First Models of Slot Machines

There is some debate about who created the first slot machine, but most historians credit Charles August Fey. He invented the first automatic payout device, but around the same time, a company based in New York called Sittman and Pitt created the game that Fey might have used for his inspiration.

In 1891, Sittman and Pitt developed a game that cost a nickel to play. It had five drums with ten cards on each drum. Players could win if the drums landed on a poker hand after they pulled a lever.

The company removed the ten of spades and jack of hearts from the deck for two reasons.

First of all, it was easier to have an even 50 cards instead of 52, and removing those two cards, in particular, cut the possibility of getting a royal flush in half, which raised the house advantage. Royal flushes are the highest possible hand in poker, so they wanted to lower the chance that they had to pay out for a significant win.

However, at the time, the tabletop device did not have an automatic payment mechanism, so players who won had to collect their winnings from the bartender.

Most often, they did not win any money but instead earned free drinks or cigars or other non-cash prizes.

Charles August Fey created a similar machine with an automatic payment system. The exact date of his invention is unknown, but it was sometime between 1887 and 1895, which means it was either right before or right after the Sittman and Pitt device.

He needed to make the winning combinations simpler so that the machine could recognize a win and automatically pay the players, so he used three reels with only five symbols.

His machine was called the Liberty Bell because that was one of the symbols used on the reels, along with hearts, diamonds, spades, and horseshoes. The highest possible combination was three liberty bells.

This device was only one of his designs, but they were successful enough that he was able to quit his job to open a factory. He manufactured approximately 100 Liberty Bell slot machines himself, but the San Francisco earthquake of 1906 destroyed almost all of them.

Fey never patented his design, so other device manufacturers copied it.

Both the Sittmann and Pitt machine and the Liberty Bell operated the same way. They had a lever that the players had to pull to activate the device, after inserting a nickel. The lever set the reels in motion and stretched a spring that would gradually stop the reels one by one.

Many players believed that they could increase their odds of winning by pulling the lever in a specific way, which led to many of the superstitions that some people still believe today.

How Getting Around the Law Led to New Inventions

Almost all slot machines were operated inside bars and saloons, which gave them a bad name among clergymen and lawmakers.

In the early 1900s, slot machines were outlawed in almost every state, but the manufacturers were not ready to give up without a fight.

To avoid problems with the law, they started offering other prizes instead of coins. In most cases, this meant a return to the days before the automatic payment system, where the winners simply collected their prizes, in the form of drinks or cigars, from the bartenders.

But in 1909, the Industry Novelty Company found another alternative.

They replaced the suits and liberty bells with fruit symbols. Each fruit corresponded with a different flavor of gum that the machine would dispense whenever the player won.

The Mills Novelty Company copied their design, but they added the bar symbol that we know today, which symbolized a pack of gum.

In 1916, the Mills Novelty Company also invented the first version of the jackpot. They added a few combinations of symbols that would make the device empty out all of the coins that it had previously collected.

Slot machines continued to be popular throughout the 1920s and 1930s, but soon knowledge spread that the companies that distributed slot machines were often a part of organized crime syndicates, particularly in Chicago and Las Vegas.

So, new legislation restricted slot machines even more than they had been before. By the early 1950s, the only place you could find slot machines was in Nevada, which had legalized gambling in 1931.

Modern-Day Slot Machines

World War II left a lot of countries feeling desperate for new ways to make money, so they started taxing gambling revenue.

For the first time, slot machines became popular around the world. Advances in technology changed the devices to what we know today.

Money Honey: The First Electromechanical Slot Machine

Slot machine manufacturers toyed with electromechanical designs starting in the 1940s, but they were still reliant on the lever to control the reels.

In 1963, a company called Bally created the first fully electromechanical slot machine, Money Honey. It still used the lever to start the game, but the lever did not affect the reels.

Instead, the reels operated on an electric system.

Money Honey was the first game to include a bottomless hopper, which allowed it to make automatic payments of up to 500 coins. Previous machines could not offer such high payouts without relying on an operator.

Electromechanical devices were also the first to offer 3- and 5-coin multipliers, which made the potential payouts proportional to the number of coins that had been inserted. The same concept is used today with the lines that are visible on slot machine pay tables.

For example, the coins you enter are equivalent to the number of lines that you play, and more lines mean more possible winning combinations. 

Video Slot Machines and New Features

The next major innovation in slot machines was the video slot machine. In 1976, Fortune Coin Company introduced the first video slot machine. It used a 19-inch Sony TV as a display system that replaced the old-fashioned spinning reels that had been used since the 1890s.

Hilton Hotel on the Las Vegas Strip was the first hotel to offer the Fortune Coin Co video slot machine.

In addition to the use of the video screen, the Fortune Coin Co used logic boards to control the reels. These logic reels were based on attempts to create a random number generator. Scientists, mathematicians, and computer programmers had been trying to create random number generators since the 1940s.

Their initial efforts were imperfect, but they led to the logic boards that Fortune Coin Co used in its video slot machines.

Super jackpots were invented in 1986 when casino operators began using an electronic system to link multiple slot machines.

A fraction of each wager played on each device goes into a shared super jackpot that you could potentially win by playing on any one of those devices.

By the 1990s, the slot machines that we know today were in full existence. They operated using a random number generator, and almost all of them used the video display as opposed to the traditional reels.

In 1996, a software developer called WMS released the game “Reel ‘Em In.” It was the first slot machine with a bonus feature on a second screen.

Today, almost all slot machines use bonus features, free spins, and other secondary games to attract new players.

Modern slot machines became an essential part of the casino environment, and up to 70% of casinos’ income came from slot machines during the 1990s and early 2000s.

Nevada is home to approximately 200,000 slot machines, and there are more than 830,000 spread throughout the United States.

What Slot Machines Will Look Like in the Future

Despite the fact that slot machines have evolved and changed drastically since they were first invented, modern slot machines cannot seem to attract younger players.

Video games, online casinos, and mobile technology have all revolutionized the entertainment industry, and casinos are going to have to figure out a way to attract millennials if they want to survive.

Since the 1970s, slot machines have accounted for approximately 70% of casino revenue. Today, that number is down to around 64%. You might think that this is not a significant drop, so it is not something to worry about.

But the issue is that that number does not tell you who is playing slots.

Baby boomers and Generation X gamblers are the ones who are playing slots, but millennials are simply not interested. Casino executives know that they will have to find a way to attract younger players before slot machines become entirely obsolete in the next few decades.

On the other hand, they do not want to completely reinvent slot machines and thereby lose all of their older customers. They need to find a balance between the traditional slot machine and new concepts.

Here are some of the ways that they are trying to do that.

Online Slots Games

As soon as the internet became widely available, casinos flocked to the world wide web to attract new customers. Many online casinos are operated in other countries, but the global access that the internet offers enables them to cater to customers around the world.

Just like their brick-and-mortar counterparts, online casinos provide dozens of choices for slot machines.

The first real-money online casino launched in 1996, which happened to be the same year that the Reel ‘Em In game introduced a second-screen bonus game.

At first, many people were nervous about the possibility of putting money into an account on a website, but as people became more comfortable with everything that the internet could offer, online casinos became popular.

At first, online slots were merely web-based versions of their land-based counterparts. But soon, game developers realized that computer programming could overcome some of the issues that restrict land-based slots. They started adding more reels and trying out a variety of layouts. Multi-line payouts that could get automatically calculated revolutionized the slots industry.

Hundreds of companies began designing their own online slots games, so today, there are thousands of options.

Another area that computer programming works in favor of online casinos is progressive jackpots. In land-based slots, a microchip has to be embedded in each machine to keep track of the jackpot and make it available on any of those machines.

Online game developers just had to add specific code for the progressive jackpot, and they can add criteria or other variables to control the jackpot.

For example, some online casinos require a minimum bet to activate the jackpot option.

In 2013, an anonymous player playing the game Mega Fortune won a jackpot of more than 17.9 million euros! It was the most massive recorded online slots win in the world.

The only other jackpot prize that came close to that win was only 13.2 million euros.

Online slots also offered a new social experience when online casinos began offering slots tournaments. Players in a tournament get linked electronically, and they compete to see who can win the most in a predetermined amount of time.

This format allows players to compete from around the world and created the first social experience for slots players.

Friends can join the same tournament and enjoy competing against each other instead of simply sitting next to each other playing their own game.

It is incredible how much the online slots industry has expanded over the past couple of decades. The wonders of computer programming and the internet opened slots to a whole new world of possibilities that had been unattainable before.

But online slots games are just the beginning of the contemporary era of slots.

Skill-Based Games

When casino executives first began considering the issue of attracting millennials, skill-based games were their solution. Their thought process focused on incorporating video games or something similar because younger players are not interested in games that are based solely on luck.

But they also did not want to lose their older customers by abandoning the slot machine design entirely.

Most of the skill-based slot machines to enter both land-based and online casinos used skill games as a bonus feature.

The game would operate the same as a slot machine, but if you spun a particular combination of symbols, you could activate the bonus round. That bonus round transformed the screen to become like a video game essentially. Some bonus games involved shooting targets and racing through virtual obstacle courses.

At first, everyone thought that skill-based games in slots were the answer to the casino industry’s millennial problem.

But the reality has been far from their hopes.

People who grew up playing complex video games are still not interested in the traditional slot format. Bonus games give them a few seconds of skill-based gaming, but it is not enough to convince them to play.

If game developers want to really attract younger players, they need to create immersive skill-based games instead of traditional slots with skill-based bonuses.

Virtual Reality and the Casino Experience

Ever since video slots were invented in 1976, the graphics that represent the spinning reels have become a key component.

If a player has to choose between two slot machines that are the same in every way other than the graphics, they will always choose the one with higher-quality pictures and sounds. 3-D technology was an essential part of revolutionizing the graphics used in slot machines during the 1990s and early 2000s. Some slot machines now offer 4-D graphics, but even that is not impressive to young players.

One of the ways that they are trying to stay relevant is by paying attention to what is happening in the video gaming and technology industries.

Right now, virtual reality is the latest and greatest form of gaming tech. Online casinos have already embraced this technology by creating virtual reality slot machines.

Netent is a game developer that released virtual reality slots in 2016, like its Jack and the Beanstalk game.

Land-based casinos have not embraced virtual reality slot machines yet, but they are considering several ways that they can use slots to affect the whole casino environment.

Virtual reality slots are just the beginning. They are also considering adding sports betting options to slots so that you can bet on the game and play slots from the same machine.

Similarly, they are working on ways that players can do things like order drinks, play music, and text other players from the same screen that they play on.

There are some controversial ideas that casino executives are considering. For example, they could use biometric identification, like you use a thumbprint to open your smartphone, to keep track of players’ loyalty points. They could also use artificial intelligence to predict your actions and make in-game suggestions for you.

Voice control and digital forms of currency, like Bitcoin, create other possibilities.

Casino developers are caught up in trying to please their older clients by sticking to traditional forms of slot machines. But the truth is that the possibilities are endless.

If they would let go of the antiquated format, they just might find a way to attract a younger audience.

Conclusion

Slot machines are an ever-evolving game that started as simple as the Liberty Bell and today include sophisticated virtual reality options. The heart of the game has never changed, but it might need to if casinos are going to attract millennial customers.

There is a fine line between updating a classic and inventing an entirely new form of gambling, and that is the line that casinos are trying to walk as they consider the future.

Fortunately, technology allows us to try things that we would never have thought were possible.

Personally, I cannot wait to see how slot machines change as the future unfolds.

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