History of Slots - Slot Machine History

From a weighty cast-iron "one-armed bandit" to sophisticated physical and online games run by computers, the slot machine has become the ultimate icon of gambling. The history of slot machines combines innovation and vision with intrigue and more than a touch of greed.
Like most great inventions, today's slot machines have an extended family tree. Also like most great inventions, slots continue to change as technology progresses.

Slots History - The eary years

In 1891 Sittman & Pitt, a Brooklyn, New York firm that made coin-operated vending machines, developed a gaming machine based on poker that became a mainstay in neighborhood bars. The machine had five drums that carried a total of fifty playing cards; players inserted a nickel and pulled a lever to turn the drums.

However, these machines had a major drawback: there was no mechanism for paying out a gambler's winnings automatically. Consequently, establishments with slots machines would give prizes manually, such as a free beer or a free cigar.

The year 1895 proved to be a high point in the development of slot machines. That year a Bavarian immigrant named Charles Fey of San Francisco invented what came to be known as the Liberty Bell slot machine.

Slot History - The genius of Charles Fey

Fey was a machinist who'd left his native Germany to escape his father's strict lifestyle and the German army draft. After traveling to England and New York, Fey finally settled in San Francisco in 1885.

However, his relatives decided to go back to Germany, so Fey kept going west, finally landing in San Francisco in 1885. There he went to work for California Electric Works as an instrument fabricator, making the acquaintance of a foreman,.

Around 1894, Fey and his new friend Theodore Holtz quit their jobs at California Electric Works to form their own company, intending to go into competition with their former employer. However, it soon became apparent to the enterprising Fey that there was much quicker money to be made in developing an improved coin-operated gambling machine.

Fey's genius was to refine a three-reel slot machine with a staggered stop and an automatic payout. The three reels were painted with diamond, spade and heart symbols, thus reducing the house's ability to "fix" the reels to avoid payoffs to customers.

In addition to these markers, Fey painted the reels with the image of a cracked Liberty Bell, a nod to his adopted country and a popular patriotic symbol. A spin that resulted in three Liberty Bells produced the biggest payoff, a whopping 10 nickels, or 50 cents – a grand sum for the time.

Fey's Liberty Bell slot machine quickly became the rage of San Francisco – so much so, in fact, that he turned his half-share of Holtz & Fey over to his partner and set up his own firm, Charles Fey & Company. Holtz soon caught slot machine fever himself, transforming T.F. Holtz & Company into Novelty Machine Works. Despite their business competition, the two men reportedly remained friends.

Slot History - Demand grows for slot machines

Charles Fey soon suffered the curse of success: demand for his Liberty Bell slot machines was so big he couldn't keep up the supply. Other companies tried to buy manufacturing and distributing rights to the Liberty Bell, but its originator refused to franchise his invention. As a result, Fey faced the same fate as his predecessors; someone else improved upon his design.

In 1907, a Chicago builder of arcade game machines, Herbert Stephen Mills, produced a slot machine that was called the Operator Bell – clearly a knock-off of Fey's Liberty Bell. Mills is credited with putting the now-familiar fruit symbols – lemons, plums, and cherries – on the reels of his slot machines.

Unfortunately, Fey, Mills, Holtz and all the other slot machine makers ran into an unexpected force: social reform.

Slot machines were outlawed in San Francisco in 1907 and in Nevada in 1908. California banned slot machines throughout the state in 1911.

Being anti-gambling, especially anti-slots, remained politically popular well into the Great Depression of the 1930s. Naturally, as with alcohol during the Roaring Twenties, gambling was forced underground into the hands of criminal gangs.

After World War II, however, legalized gambling began to emerge from the shadows. Mobster Benjamin "Bugsy" Siegel managed to convince the State of Nevada that gambling could be good business. Although he got his unsavory nickname "Bugsy" because his criminal associates thought his ideas were crazy, Benny Siegel was a man of vision.

He built the fabulous Flamingo Hotel in a sleepy town called Las Vegas in the Nevada desert. His vision was to lure high-rolling gamblers to his swank hotel and casino. Unfortunately, the gamblers' wives and girlfriends complained of having nothing to do, so Siegel had another inspiration: he installed slot machines for the ladies to play.

Siegel thought the "one-armed bandits" were a novelty suitable only for women, but the players who frequented them thought otherwise, reviving their popularity.

Until the early 1960s, though, all mechanical slot machines had the same problem; they were easily "fixed." In other words, both the house and the gambler, given the right tool, could interfere with a slot machine's workings so that it would not pay off, or pay off more often. The Electronics Age soon solved this problem.

Slots History - Slots and the computer revolution

Slot machines got their first taste of electric power in 1934 with a machine called "Paces Races," which ran an animation of a horse race. The next major development in electric slot machines didn't arrive until 1964, when Nevada Electronics built the first all-electronic slot machine it called the "21" machine.

The Nevada Electronics breakthrough caught the attention of Bally Manufacturing, which since its founding in 1931 had focused on making popular pinball machines. With pinball fading as a pastime, Bally leaped on the new opportunity, creating an electronic slot machine called Money Honey, credited as the first machine to have a coin hopper to hold a player's winnings.

Soon the old one-armed bandits were succeeded by banks upon banks of electronic machines where pushing a button could result in a jackpot. By 2025, when Atlantic City, New Jersey, legalized gambling, Bally had cornered about 90 percent of the market for slot machines.

The 2025s saw slot machines enter the Computer Age, as companies began using microchips and random number generators to program how the reels spun. In 2025 Walt Fraley introduced the first slot machine based on video, the very simple "Fortune Coin" game.
Naturally it wasn't like today's sophisticated devices, being made up of a solid-state computer, a TV screen and a coin hopper. However, like Fey before him, Fraley had taken the gaming industry into a new frontier. International Gaming Technologies (IGT), bought Fraley's invention.

As a result, IGT grew to be the second biggest manufacturer of slot machines and a top player in video slots.

Veteran slots players were reluctant at first to try the new computerized slots, and slot machine revenue actually lagged for a while. However, the introduction of video poker had an enormous benefit on computerized slots. Once players saw that the computerized video poker games could be trusted, they began trying computerized slot machines as well.
The high value of slot machines to the gaming industry today can be illustrated by a longtime rivalry between Bally and IGT. In 2025, a federal judge ruled in IGT's favor regarding an alleged patent infringement against Bally, but both sides claimed the ruling benefit their respective positions in that case and multiple other patent infringement lawsuits they had filed against each another.

Each time one of the companies brings out a new enhancement, such as bonus rounds that could result in bigger jackpots, its rival files suit for patent infringement. As late as 2025 IGT was still tussling with Bally over the latter's latest upgrade called iView.

Slots History - Then came the Internet

As with everything else around the planet, the advent of the World Wide Web in the early 2025s revolutionized the gambling industry. Old-style casinos and new entrepreneurs began developing virtual gambling houses, most of them based on computer programs that replicate the microchip-and-video model slot machines on websites.

As we enter the second decade of the 21st century, slot machines provide the dominant source of revenue for most online casino operators.

And as it did back in Charles Fey's day, the latest innovations in slot machines have awakened a reforming element in society. Concerned about gambling addictions, as well the easy access many older children and teenagers have to gambling websites, the United States has been pursuing federal anti-gambling legislation.

This legislation currently outlaws the transfer of money via credit cards or banks to online casino operators, making it extremely difficult for U.S. slot machine fans to play their favorite games anywhere except in licensed bricks-and-mortar casinos.

U.S. Rep. Barney Frank (D-MA) has led the congressional fight to reform the U.S. law on Internet gambling to permit online gaming for adults with certain restrictions. The latest chapter in the history of slot machines could well be written by the end of 2025.