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The Battle Between Tradition and Technology

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March 28, 2014
Bill Geoghegan - Bill@LDTConsulting.com

While almost every other casino game has its origins outside of the U.S., the slot machine is a purely American invention.

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While almost every other casino game has its origins outside of the U.S., the slot machine is a purely American invention.

Contrary to popular opinion, the most popular game in America’s Western history was not poker but Faro. Many of our Western heroes, Wyatt Earp and Doc Holliday, among others, spent most of their time not chasing outlaws but dealing Faro. It was an easy game to learn and required relatively little in the way of equipment to be played in a group setting. It was not uncommon for 12 to 15 people playing Faro simultaneously. In comparison to today’s table games, Faro had a very low hold percentage for the dealer. As a result it was not uncommon for a Faro dealer to cheat the players. Eventually, this practice caught up with the game and many people started playing poker amongst themselves instead of playing Faro against a dishonest dealer.

In the latter part of the 19th century, a number of mechanized arcade games were produced including mechanical versions of punch boards that gave credits for candy, gum, cigars, cigarettes or additional chances to play. Other coin-operated machines would return prizes for accomplishing a task such as punching a bag hard enough. Because these machines required a coin dropped in a slot, they were referred to as slot machines.

During the 1880s, the nation was in the grips of a poker craze. In New York the Sittman and Pitt Company developed a machine that was loosely based on poker. Their original machine had five drums each showing 50 cards. When the player inserted a coin into the slot and pulled a handle, the drums would spin. When the spinning stopped five cards would line up to form a poker hand. The strength of the hand displayed when the drums stopped spinning determine whether the player won or lost. The first machines did not dispense any coins or tickets, but the proprietor or a clerk would offer payouts to a player with a winning hands usually in the form of a free drink or some other merchandise. These machines were normally found in a tobacco shop or saloon. They were highly popular in New York but their popularity exploded in San Francisco where the poker craze was the strongest.

The earliest machine which actually paid a player directly was invented by Gustac Schultze.  The game was called Horseshoes. If the nickel inserted by a player fell within one of 10 horseshoes, the player was paid back two nickels.

Charles Fey and Theodore Hotz opened a shop to supply Schultze with parts for his horseshoe wheel machine. Realizing the opportunity, they set about to develop a card-based machine that included automatic payout feature. Fey was unable to engineer a five reel card game, so he settled on a simpler three reel design. The machine rang a bell when a winning spin was achieved so Fey called the machine the Card Bell.  Since he could no longer simulate a poker hand, Fey eventually replaced the card pictures with icons and renamed the machine Liberty Bell. The machine was a phenomenal hit. The Liberty Bell paid a jackpot when three cracked Liberty Bell icons showed in-line in the center of the reel window. It also had lesser payouts for other icon combinations. These payouts were frequently in the form of candy or gum, but many times the benign payout was traded for cash by the proprietors.

San Francisco quickly became the slot capital of America. Like Schultze, Hotz and Fey, a number of German immigrants with clock engineering and manufacturing experience created more intricate machines. Mechanical horse racing, multi-wheeled slot games and other reel machines produced nearly $200,000 in tax revenue for the city of San Francisco in 1908. Frequently these slot machines became the primary source of income for the proprietors of tobacco shops and bars. Initially they had been looked at as trade stimulators, offering cigars or drinks for winning results, but it soon became apparent that these machines appealed to the gambling instincts of people of moderate means. Soon anti-gambling factions took over and outlawed these slot machines.

On October 1, 1910, Nevada reluctantly became the last Western state to outlaw gambling when a strict anti-gaming law became effective that even forbade the Western custom of flipping a coin for the price of the drink, however gambling crimes were seldom enforced.

The early 20th century was the genesis of the temperance movement, and drinking and gambling were considered vices that should not be tolerated within society. The era of legal slot machines openly displayed in tobacco shops and bars ended but with the Prohibition era, slot machines flourished in speakeasies. The organized crime factions which ran the speakeasies controlled not just the distribution of liquor, but offered gambling.

In 1931, the Nevada legislature legalized gambling at the local level. Las Vegas already had a well-established illegal gambling industry and began its rise as the gaming capital of the world. Legal slot machines were typically installed for the amusement of the wives and girlfriends of the gambling clientele who were spending their hours playing craps, blackjack and poker. 

All early slot machines depended upon the number of icons on each reel and the probability of lining up winning icon combinations. Each pull on the lever of the slot machine had the same chance of winning as the previous poll. Unlike the early machines which had an icon at every position, slots added “ghost stops” between icons as a way of manipulating the probability. These were positions that did not display an icon, and therefore would eliminate any payout.  It was not uncommon to have multiple ghost positions between icons.
In 1963, Bally Manufacturing created the first electro-mechanical version of the slot machine called the Money Honey. It still relied on mechanical reel combinations, but no longer required the player to pull the lever in order to initiate play.

All mechanical slot machines required a significant amount of maintenance to continue to perform properly. It was not until 1976 that the first true video slot machine was produced. Video slots were far easier to maintain and casinos quickly converted their slot floors to these devices.

Unlike the mechanical reel machines, video slots rely upon electronic random number generators (RNG) to determine the results of play. In fact, the result that it displayed is actually a representation of a predetermined win or loss amount, made to simulate a mechanical reel machine. Gambling regulations typically require that a random number generator works in the background of the game and continuously cycles available results until an event such as a button press occurs, at which time the next random result is returned. In this way, the actual result is a combination of the random number generator cycles and a time interval between events, therefore it will be impossible to predict the next result.

While it was easy for players to understand the randomness of mechanical slot machines, the advent of electronic RNGs and displayed results have caused many people to believe that the casino can change the results depending on time of day, day of week, who the player is, etc. In fact, nothing could be farther from the truth. The probability of the game is built in to a pay table which cannot be adjusted, after it has been approved by the gaming regulators. While these pay tables can be extremely complex, they are fixed for the game, and each play has the same probability of winning as the previous or next play.

With advances in animation, touch screen technology, and computerization it would be easy to show results of play in a form or format that looks nothing like a reel based slot machine, but the tradition of the reel slot machines has caused manufacturers to continue to use a simulated display of the reels to show results. Whether it is reticence on the part of the player to play machines that do not show results in that fashion or whether manufacturers are not willing to test the waters with alternate displays of results is unknown. The big advance brought by computer technology and animation is the ability to create bonuses in an entertaining and captivating fashion, but the primary play still simulates the spinning reels. 

With the new generation of young adults having grown up in role-playing environments on the Xbox, Wii and Playstation, it will be interesting to see how long before the gaming machine manufacturers address this market with games that no longer display results in the traditional format. Imagine controlling your avatar by coin in determining the direction taken. The result of each move could be uncovering a treasure, bomb or other event. The same probability tables could easily be transformed into this type of display. It remains to be seen whether an innovative manufacturer will take this approach in an effort to win a new generation of gamers into the casinos, and whether the abilities that technology can bring to the gaming experience will overtake the adherence to the traditional experience that pervades the industry today.
Bill Geoghegan is a consultant in Las Vegas. He can be reached for comment at Bill@LGTConsulting.com.

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