Trading Stimulators

The genesis of the slot machine happened in 1876 when Edward S. McLoughlin invented the Guessing Bank. The Guessing Bank was intended for distribution in shops and bars, where the heavy mechanical device would sit on the counter or bar. Customers would insert a penny and select a number. A dial would then spin and if the dial landed on the number the customer selected a prize was won.
 
The Guessing Bank did not give out cash prizes as is now standard. Instead, each establishment housing one of the devices would set its own prizes – generally from their inventory – to be awarded in the case of a win. At this point in time, the machines were considered ‘trade stimulators’ rather than gambling games, intended to encourage additional customers to come into the establishment to partake of the primary service rather than be the primary service themselves.

Poker Based Games

While other similar dial-based games did gain market share in the interim, it was over a decade later, in 1890 that Frank Smith of the Ideal Toy Company of Chicago made the next important development in the evolution of the slot game. Smith introduced a 5 reel system with each reel featuring playing cards. When the customer inserted a coin, the reels would spin and land on random cards. The resulting 5 card hand was then graded based on the strength of the hand in the game of poker. At this point in time wins were not yet paid out by the machine and if the customer received a winning hand their winnings would be delivered by an attendant.
 
It should be noted that alongside being a precursor to the modern-day slot machines Smith’s game was also very clearly an early form of Video Poker and could likely be considered an ancestor to many of the table poker games that are now found in casinos as well.

From what we can determine, somewhere between 1891-93, the Brooklyn firm Sittman and Pitt launched their own variation of the Smith developed game. The basic function was similar but two cards were removed from the deck to provide the ‘house’ a higher edge over the player. The cards that were ordinarily removed were the Jack of Hearts and the Ten of Spades. The removal of these cards removed two of the four possible Royal Flush combinations.
 
At this juncture all wins still had to be paid out manually. The complexity of the poker format, which resulted in a large number of differing winning combinations and different sizes of win, was restrictive in terms of developing an automatic payout system.

Other Early Games

In 1892, the John Lighton Machine Co. of Syracuse New York released the ‘Coin Drop’ game. This game allowed the player to drop a coin into a slot at the top of the game. The coin would then fall down through the machine, bouncing off pegs on the way down and either fall into the games banking box or trigger a payout to the player of 3 coins. Similar games can be found in many modern arcades today with the addition of sliding shelves with piles of coins at the bottom of the machine that can result in far large numbers of coins being paid out to the player. In fact, this game has even clearly influenced the mechanics of the popular game show Tipping Point.
 
In 1893 Gustav Schultze amalgamated the concepts for the dial based game and the slot based concept of the Coin Drop and launched the Automatic Check Machine. The player would pull a lever on the side of the machine then a large wheel on the front of the machine would spin. The wheel was decorated with strips of colour, some of which had prizes on them. If the wheel landed on one of the prize strips, the player won a prize.

This side lever design is widely accepted to be where the classic ‘one armed bandit’ design that would later come to be near universal originated. It should also be noted that the Automatic Check Machine bears a striking similarity to the modern day ‘Big 6 Wheel’ and it seems reasonable to suggest that this game drew on this early variation for inspiration.
 
There seems to be some contention at this point between various sources as the timeline and credit for the next significant development of the first game with an automatic payout. Both Schultze and the man we will discuss next – Charles Fey – are credited with developing the Horseshoe Slot Machine. Both worked together at various points over the relevant period, so it seems plausible that they may have worked together. Either way this machine paved the way for the first release that the average person today would view as a ‘slots machine’.

The First Real Slots Machine

Sometime between 1898 and 1905 Charles Fey set to the task of combining the automatic payouts of the simpler Automatic Check Machine and Coin Drop games with the excitement of the more popular card/poker based games. Initially he looked to develop an automatic payout directly for the poker based games, but due to the large number of hand combinations and the varying payout values for different hands this proved to be challenging. As such he ultimately opted to reduce the number of reels from 5 to 3, significantly reducing the number of potential winning combinations. He also moved away from using playing cards on the reels – as the objective was no longer to create a winning poker hand there was no longer a need to use card symbols – and instead switched to pictures of horseshoes, diamonds, spades, hearts and bells. The decrease from the previous standard of ten cards per reel to five symbols again simplified the game allowing for Fay to develop an automatic payout system.

This machine was originally marketed as the ‘Card Bell’ but later was rebranded to the far more recognisable ‘Liberty Bell’. The top payout was won when the player received 3 bell symbols.The Liberty Bell machine quickly became very popular within the San Francisco community, however did not spread widely beyond the city. There are differing accounts as to the reasons for this. One version of events suggests that Fey was disinterested in the mass manufacturing of his machine and instead opted to engage deals with individual bar owners to install his machines, with the bar owner paid half of the take of the machine. In this version of events, Fey continued in this manner until 1906 when an earthquake that hit San Francisco resulted in Fey’s workshop burning to the ground. At this point other manufacturers moved in to fill the market gap left by exit of the Liberty Bell. The alternative narrative is that Fey could not patent the Liberty Bell due to the illegal status of gambling in California. This allowed competitors to challenge his market dominance. Of course these accounts are not necessarily mutually exclusive and it is possible that both combined resulted in the original form of the Liberty Bell’s popularity not extending further than San Francisco.
 
At this juncture all wins still had to be paid out manually. The complexity of the poker format, which resulted in a large number of differing winning combinations and different sizes of win, was restrictive in terms of developing an automatic payout system.

The Mills Bell

At this stage in the story another conflict in the records occurs. The Mills Novelty Company – who had already had significant success with their own spinning dial type games, most notably the ‘Owl’ – started to distribute the Mills Liberty Bell. This machine was very closely modelled on the Fey Liberty Bell. How this came to pass is a subject of contention between the descendants of Fey and Herbert Mills. Fey’s family contested that an employee of Mills San Francisco office took one of Fey’s Liberty Bell machines from a bar to allow his employer to copy the design. Mills asserts that Fey, who was no longer in a position to manufacture the game himself, agreed a deal to give the design to Mills in exchange for the production of a number of machines that would be given to Fey free of any charge.
 
Regardless of which account is more accurate, the Mills Novelty Company quickly gained popularity across the United States and resulted in most competing manufacturers shifting to solely producing slots type games.

Fruit Machines

Over the next several decades the market for slot machines was strangled by political maneuvering. Firstly many states brought in legislation prohibiting gambling. This was further exacerbated by the introduction of Prohibition. As the primary vendors for these early slot machines were bars, the ban on alcohol and consequential closure of bars had a severely adverse impact on the industry.
 
The response to this was to award prizes in the form of gum or cigarettes instead of money. And this is where the first ‘Fruit Machines’ were released. The standard symbols on the reels were replaced with various fruit symbols. When the player won, the type of fruit making up the winning combination determined the flavour of gum they would receive as a prize. This change allowed the games to be stocked legally in many more venues as they were no longer considered gambling games.
 
While these restrictions did help coin a term that is now synonymous with slot machines, it did retard the development of the game for an extended period of time.

Bally’s Money Honey

It wasn’t until 1963 when the next major development in the evolution of the modern slots game occurred, when Bally’s launched the first fully electromechanical slots machine, Money Honey.
 
This game was a full gaming cabinet, the likes of which are found in casinos and pubs around the world today, featured a bottomless hopper (i.e. the game was very unlikely to run out of funds to pay winnings) and could pay out up to 500 coins without the need for any human assistance.
 
This game still featured the classic ‘one-armed bandit’ lever on the side of the machines and the physical reels which spun on the machine.

The Birth of Video Slots

In 1976, Fortune Coin Co. launched the first ‘video slot’, ‘Fortune Coin’. This game replaced the physical reels with virtual reels displayed on a TV screen in the game console and replacing the arm lever with buttons.
 
The introduction of virtual reels, while perhaps not fully appreciated by the layperson, was a revolution for the function of slots games. Up until this point, slots games had been constrained by the physical aspects of the reels. Reels could only contain so many symbols and physically fit inside a gaming machine. Virtual reels, or pseudo-reels, allowed for the reels to be as long as the developer wanted while requiring no additional physical space. That made the options available to slot developers from this point on far broader and the games far more flexible.

Initially this game received a lukewarm reception from players. The lack of physical reels led many players to question the fairness of the game. It was after its initial release – with the rising popularity of Video Poker and increasing consumer trust in the virtual format of games – that Fortune Coin began to gain success. In fact the game became such a success that the company was bought over by IGT, one of the companies that had been fundamental in the success of Video Poker.
 
For more reading on the history of coin based gaming machines we would recommend this fantastic article – The History of Coin-op.

Online Gambling

In 1994 a collaboration between Microgaming and Cryptologic launched the first online casinos, taking advantage of the improvement in the availability of internet access and the virtual reels that players have become accustomed to. The internet proved the perfect medium for players to engage with slots games.

Bonus Features

It wasn’t until 1996 that WMS Industries – now owned by Scientific Games – released the first game with a bonus feature that took the player away from the reels, Reel ‘Em In (there have been several games with the same or similar names since this time). Up to this point, bonus features on slots games consisted of additional payouts or free spins. By taking the player to a totally new screen – facilitated by the fact that physical reels had been replaced by a TV screen – the game developers could offer players a secondary game when the bonus feature was triggered.
 
This was another very significant development in the evolution of the slots game. In the modern online era, bonus features have come to dominate and dictate which games become popular with players. The basic games that were available up to the 1990s, that feature only reel spinning functionality, find it very challenging to gain purchase in the modern market. Players want more bonus features and more creativity in how the bonus features are presented.

The Internet Era

The internet era has radically changed slots games. No longer restricted by expensive manufacturing costs, bulky machine consoles or even the need for the player to transport themselves to the location of the console, there has been a huge increase in the number of companies actively developing slots games for the online market.
 
This increased competition has organically resulted in greater creativity and willingness to deviate from the classic slot structure to ensure that players are excited and engaged by the product being offered and don’t migrate to another provider.

Reel Layouts

One of the biggest ways that slots games have changed is the fundamental structure of the reels. While the era of physical reels mechanically restricted slot developers into using certain formats, the switch to a screen type interface broke this box entirely. This wasn’t immediately recognised when screens were first introduced in the late 1970’s, but by the 2000’s slot developers where quickly exploring the manner in which they could adjust the reels to create novelty for players.
 
This started with making each symbol run as it own separate reel as seen in Net Entertainment’s Jack Hammer:

This didn’t fundamentally change the layout of the reels, but demonstrated that designers were starting to see the reels in a different way.
 
We then saw the core layout of the reels start to change. From more reels to stacking multiple sets of reels on top of each other to unusual layouts to additional horizontal reels, you can see below how the reels have started to change:

Rolling Reels

Also known as Cascading Reels or Avalanche Reels, Rolling reels were first introduced by Net Entertainment in 2010 in their game Gonzo’s Quest. Whenever the player receives a winning combination, after being paid the symbols that made up the win are removed from the reels allowing the symbols above to drop down, new symbols to fall in at the top of the reels to fill any spaces and news wins to be created. This process repeats until no new winning combinations are received.
 
This feature would have been impossible with a physical reel and is now also often found with win multipliers, with each consecutive win subject to a bigger multiplier.

Locking Wilds

Locking Wilds are a variation on the classic Wild symbol (a symbol that will mimic the symbol that will give you the best possible winning combination). While the classic Wild symbol is spun away with each spin, a Locking Wild locks in place, staying in its position while all the other symbols are spun away. Locking Wilds will tend to remain in place until some pre-determined criteria is met. This may be a certain number of spins, a number of consecutive wins or losses, another special symbol being received or a bonus feature being triggered – there are lots of variations on this theme.

Walking Wilds

Walking Wilds are a variation on the Locking Wild symbol. Walking Wilds, like Locking Wilds, will remain on the reels when the other symbols are spun away but they will also change their position. Some move in a specific direction. Some move in random directions. Like Locking Wilds this pattern will continue for a number of spins and will end when a pre-determined criteria is men – often the Walking Wild symbol moving off the edge of the reels.

Re-Spinnable Reels

This feature is old as far as modern developments go. We first encountered it in the Microgaming game Retro Reels. It allows the user, after a spin, to choose to re-spin reels individually. This allows the player to attempt to complete wins that were perhaps close on the original spin but did not quite land. The price to spin any specific reel will vary with the chance of winning so, for instance, if you have received two of the three symbols required to trigger the bonus feature, spinning one of the reels that does not yet have a bonus symbol is likely to be expensive as the chances of triggering the bonus feature are high.

Bonus Buy

Bonus features have become so popular with players that for many players today the bonus feature is why they play. As bonus features are generally where bigger wins occur this is an understandable response.
 
A number of software providers have recognised this dynamic and now offer players a way to skip to the bonus feature. Bonus Buy features – as the name suggest – allow players to ‘buy’ the bonus feature, skipping the play on the main reels usually required to trigger the bonus organically. There are pros and cons to this dynamic.
 
The pros to Bonus Buy games are that you can access the bonus feature whenever you like and often these games are built in such a way that the Bonus Buy feature has a far higher RTP than the main game (costs the player less).
 
The cons to Bonus Buy games are as follows:

They require a far larger stake than the standard game. This means both gambling more and far higher volatility.

Bonus term violations – To avoid confusion we should be clear that we are using the word ‘bonus’ in two different contexts here. Firstly to describe the bonus feature in a slots game and secondly to describe a promotional cash incentive offered by the casino to players. These promotional cash incentives generally carry a ‘maximum allowed bet’ wagering term. If players violate this term by placing wagers above the maximum (usually €/£5 or equivalent) the bonus contact is void and all the player will get is their deposit refunded. Players have been known to play on the main game staking compliant amount and to forget about the maximum bet term and buy the bonus feature for a stake far exceeding the maximum allowed bet term. This inevitably results in disappointment.
 
To be clear, when you ‘buy’ a bonus you are placing a larger wager on the outcome of the bonus feature. This is a single bet. Even when ‘buying’ a number of free spins. As you cannot split the free spins up and buy them individually, you are placing a single bet on the overall outcome of the bonus feature (i.e. all the free spins). This is equally true of features that allow the player to claim their win from the bonus feature, or replay the bonus feature in exchange for giving up the current win – you are simply wagering the current win on the outcome of playing the bonus feature.

Some regulatory authorities have taken a dim view of ‘Bonus Buy’ games, indicating that they have responsible gambling concerns relating to encouraging players to place bets that are far higher than they would usually stake. The UKGC are one of those regulators to have ban Bonus Buy games and highlighted the following licensing conditions as of particular concern:
 
“RTS requirement 3A : An explanation of the applicable rules must be easily available to the customer before they commit to gamble. The content including artwork and text must be accurate, and sufficient to explain all of the applicable rules and how to participate. All reasonable steps must be taken to ensure that the content is understandable.
 
‍RTS requirement 14A : Gambling products must not actively encourage customers to chase their losses, increase their stake or increase the amount they have decided to gamble, or continue to gamble after they have indicated that they wish to stop.”
 
As a result of the position of the regulator Bonus Buy games are not available in all jurisdictions.
 

Banking Bonus Triggers

These games forego the standard ‘combination to trigger a bonus feature’ format that has commonly been used and instead require the player to collect specific symbols or triggers that appear more regularly until they have passed a threshold to trigger the bonus feature. This mode of feature is very engaging, allowing the player to feel that they are making consistent progress toward activation of the bonus feature. Many games that use this feature also ‘save’ the player’s progress for the next time they return to play.
 
A variation on this theme is where different bonus features are made available as the player progresses through the game, allowing the player to experience variation in the features that they encounter the longer they play.

Return To Player (RTP)

Another significant change that has occurred with the digital age of slots games is a significant improvement in the Return to Player (RTP) that is being offered to players.
 
Prior to the rise of the internet and online casinos, slots games were amongst the worst games that could be played in a casino. Unlike traditional table games – where it simply required someone with a background in mathematics to derive the House Advantage based on the probabilities of the various outcomes – as there is no sound way to intuit the probabilities of the winning combinations when playing slots there was no way for players to determine what the RTP of any given game was. Add to this that casinos have traditionally been reluctant to make this information available to the public and players have often been left completely in the dark regarding how much they are actually being charged to play in comparison to other games when they went to a slots machine.
 
Casino operators exploited this ignorance by ramping the House Advantage – or reducing the RTP – until slots games often offered the worst odds that a player could bet into.
 
There was a logic to this – with the offline casino model the house can only profit as long as the player is actually at the casino. This created an incentive for the operator to look to generate as much revenue as possible from each player that visits, not having any confidence in the player coming back. Alongside this, when the player was in a casino they were a ‘captive audience’ in that, short of a few gambling hubs like Las Vegas, they did not have easy access to any competitor services.
 
‍Studies on the RTP of offline slots games have often shown them to be in them to have RTPs ranging from ~93% right down to 85%! To put this in comparison, a double zero Roulette game, the worst type of Roulette for the player, has an RTP of 94.64%, higher than the best of the slots games in the casino, and double zero Roulette is a bad bet compared to many that can be found in casinos.
 
With the advent of the internet, and specifically the development of mobile devices, players no longer needed to travel to a casino to play. In fact they are carrying hundreds of casino around in their pocket at all times. They can also switch to a competitor service with a few clicks.
 
This greater access to gambling and ease with which the consumer can switch brands has fundamentally changed the operator’s business model. They can no longer focus on extracting maximum profit from players during that short window of time that the player is going to have access to their gaming services. Instead they have had to focus on offering the maximum entertainment to keep players engaged and coming back and to prevent drift to competing services. The impact that this has had on games is that RTP figures have broadly speaking been driven up meaning they cost the player far less. Online, while you do still occasionally see a game with a 85% RTP, on average the RTP of modern slots releases is around 96% – better than double zero Roulette – and if you look carefully you can even find games with an RTP as high as 99%!

Frequently Asked Questions

When was the first slot machine invented?

The most rudimentary slot machine was invented in 1876 but it wasn’t until 1898 and 1905 that the first slot machine that would be recognisable to modern players was released.

Where did the term ‘slot machine’ come from?

The term slot machine refers to the hole – or ‘slot’ – in the game machine where players would originally insert the coin that they were going to gamble. This mechanic has slowly faded out as card payments became more and more prevalent and the need to insert physical coins diminished.

Why are they called ‘one-armed bandits’?

This terminology is derived from the early mechanical slots machines, where after inserting your coin you would pull the large lever – or arm – on the right-hand side of the machine. This is where the ‘one-armed’ part of the name came from. ‘Bandit’ may have been derived from two places, but more likely a combination of the two. Firstly, there were some early-ish slots machines that were designed to look like a bandit from the old west, with the lever being their gun arm. Secondly, losing players regularly felt ‘robbed’ by these machine, hence the comparison to banditry.

What are the oldest slot machine symbols?

The very first slot machines used numbers, then it progressed on to playing cards before the introduction of the symbols we are more familiar with today like Bells and Horse Shoes.

Why are they called ‘Fruit Machines’?

The term ‘Fruit Machine’ came about in the early nineteen hundreds when gambling was banned in many states in America. Instead of issuing monetary payouts many of the game providers switched to offering packs of chewing gum. They changed the symbols on the reels and the fruit that you received decided the flavour of gum you would win. Hence ‘Fruit Machine’.

What was the name of the first slot machine?

The first game that we would recognise as a slot machine was called invented by Charles Fey and was called the ‘Liberty Bell’, though it had previously been called the ‘Card Bell’. The name was chosen both due to the jackpot of the game being paid out when the player received three 3 symbols and to appear to the patriotic sentiment of players in the USA.

How do you pick a winning slots machine?

You don’t. Any site that tells you that you can is lying to you to try and get you to gamble more than you should.
 
Unlike games like Blackjack that have a memory (cards that have been dealt are put in the discard tray and cannot be played again – this influences the cards that are left to be played), slots games are what are called ‘mathematically independent’. In other words, what happened on the last spin has no impact on what will happen on the next spin.
 
Many players will look for ‘hot’ or ‘cold’ machines/games, mistakenly believing that if the game has been paying out a lot recently that it is more likely to for them (hot) or that a game can be ‘overdue’ for a win (cold). These beliefs are entirely without basis in fact and fall under the Gambler’s Fallacy.
 
Setting aside progressive jackpots, a slot game is just as likely to pay out a big win or bonus feature on this spin as it was on the spin before or will be on the spin after. Historic results do not alter in any way the probabilities of any event occurring. Having had a long losing streak on a game does not mean that it is overdue to pay out. Having a big win in a game does not mean that it is less likely to give out another big win.
 
Progressive jackpots should be considered separately, not because winning the jackpot gets more or less likely if it has/has not been won recently, but because the size of the payout varies over time. You are just as likely to win the progressive jackpot on the spin immediately after it was paid out as you were the spin immediately before it was paid out. But if you win on the spin immediately after the jackpot has been paid out you win far less. As such, if you’re going to play progressive jackpot games – and it should be noted that these games are extremely high variance and as such only for players who are happy to experience long losing streaks – you should wait until the jackpot value of the game is higher than the average payout. There are various resources online that chart this information.
 
Our strong advice is to avoid any site, service or person that encourages you to think there are any tricks that can make you a winning player. While there are consistent winning gamblers online, these players are utilising promotional incentives in a mathematically efficient way that allows them to gain an edge over the house. They do NOT simply pick ‘hot’ machines or any other such superstitious irrelevance.
 
The best advice for any regular player is to pick a game with a high RTP figure – this will make you more likely to lose less in the long run – and to be sure that you are comfortable with the likely reality that the casino will come out ahead in the long run. You have to pay for the entertainment after all! Somebody pays for all those lights!