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Many years ago, casino executives were surprised to discover that the money they were making at the table games was beginning to decline, and the profits generated by the slot machines were growing.
After all, to casino executives slot machines were really just a few toys they kept around to entertain the wives of the high rollers while their husbands were busy at the tables. It didn’t make any sense that humble slot machines should be supplanting the table game.
But the casino executives just weren’t paying attention. With computers becoming a vital part of every day life, young people developing an attraction to video games, and instead gratification turning the modern world upside-down, it was only natural that slot machines would begin to become the casino’s main profit center.
By the mid-Eighties, slot machines had matched table games in popularity, and by the time the decade turned, the so-called “one-armed bandits” had clearly become the caino’s favourite game. Today, more than two-thirds of casino revenue in the United States is actually derived from the slot machine. Those same casino executives didn’t try to change the trend, however. They were delighted that slot machines were exhibiting such popularity. After all, the money derived from slot machines is preprogrammed and absolutely guraanted, while table game revenues are subject to the ebb and flow of Lady Luck.
Sure, casino have the advantage at the table games, but because the games themselves are volatile, the money won or lost on a monthly basis can vary widely.
So slot machines beame their cushion, with table games generally making up the difference between a great month or simply a good month.
The casinos can count on slot machine revenues because the machines are simply computers. The profit can be programmed into the machines by the use of a random number generator that determines just how much of hte money played in that particular machine will be returned as winnings.
So why should casino customers play the slot machines, since the casino is guaranteed to win? The same random number generator that provides the casino with its guaranteed profit, also gives the player the opportunity to win.
SETTING UP THE PAYBACK Where did slot machines come from, and how have they achieved the remarkable popularity we see today.
Although the first slot machines were manufactured on the East Coast of the US, they didn’t start to gain acceptance until they had migrated all the was across the county to San Francisco around the end of the last century. In the saloons and brothels of the notorious Barbary Coast and the Tenderloin districts in America, customers won a cigar or a free drink when they played a nickel in the primitive slot machines, which at the time used playing cards as winning symbols. Few of the players understood the math in use on the reels of those devices, so the proprietors raked in enormous profits.
There were many slot manufacturers in those days, but only one is credited with creating the “modern” slot machine that included spinning reels and cash payouts. Charles Fey, a German immigrant, invented the “Liberty Bell” slot machine in 1899 that stands as the template for every machine built from then to the present day.
The three-reel design was copied by many other manufacturers, and by 1905, thousands of slot machines could be found in the US, in cigar stores, barber shops, saloons, and bowling alleys.
The Liberty Bell was a simple machine to explain. Each reel operated independently of the other, and stopped on after the other. Each reel had ten symbols or “stops”. As a result, there were 1,000 different combinations (10 x 10 x 10 = 1,000). Three specific symbols had to be lined up in order to wind the jackpot, which meant there was only one way to win out of 1,000 possibilities. This same basic principle lies behind all modern slot machines.
The early machines were often rigged to prevent the big jackpot from hitting, but even this fix didn’t prevent the growing popularity of the aptly named “one-armed bandits”.
The San Francisco earthquake of 1906 destroyed the factories of every slot manufacturer, but, along with the rest of the city, the slot builders returned after the destruction with even greater force. But when preachers and holy-rollers blamed the earthquake on God’s wrath over the sins of the city, slots were outlawed in San Francisco in 1909, and soon after in all of California and Nevada.
To skirt the law, alot manufacturers disguised their machines as “gum” machines that would dispense packs of gum for jackpots. To further camouflage the machines, the playing card symbols were replaced by fruit – cherries, lemons, oranges, peaches, etc – and labels of the gum brands dispensed, that evolved into the “bars” on today’s slot machines.
The imposition of Prohibition in 1918 ushered in the return of illegal slots and the lure of banned liquor and gambling caused an explosion of slots during the Roaring Twenties. The “Golden Age” of the slot machine ended quickly when Prohibition was repealed in 1934. Except for Nevada, where gambling of all sorts was legalized in 1931, slot machines were illegal and not tolerated all across the whole of America.
A mini-revival of slot machines was enjoyed after World War II, until Congress passed the Johnson Act, which banned slot machines in all states which hadn’t legalized gambling as a whole.