"Take a coin chute for the people to put their money in, and a cash box for the money to go into, and put something in between that will interest the people, and you've invented a slot machine." - Charlie Fey (1862-1944), inventor of the slot machine as we know it today.

Only unawareness, and some persi7stent Hollywood stereotypes prevents most people from recognizing the tremendous changes that are occurring in the gaming (gambling) machine industry. Long gone are the days when slot machines were placed in casinos only as amusements for the wives of high-rolling craps or blackjack players. Today's casino floors are brimming with high-tech machines that are capable of providing rich, immersive experiences, and the revenue they produce far exceeds that which flows across the green felt gambling tables. This article will explore the history and evolution of the slot machine industry, and provide some insight into the development processes used to create these games. Those from the PC and console game businesses may be surprised to see how similar the development of these devices is to their own profession. We will also delve into the special math considerations involved in creating a successful gaming machine, and take a look into the complex, ubiquitous regulatory structure that oversees most aspects of the industry.

This game is an example of a "traditional" reel-spinning slot machine. This particular model has an overhead wheel and LED panel to display game messages and bonus information.

Before we begin, let's debunk some common urban legends regarding slot machines. There is a popular misconception that a game can be made "looser" (made to pay back more) or "tighter" (made to pay back less) simply by turning a screw or knob inside the game cabinet. Others believe that the games are "fixed" to hit big jackpots on predetermined days, such as major holidays or grand openings. This simply isn't the case. The outcome of every handle pull on a modern gaming device is a completely random event (or at least as random as today's technology allows). As we shall see, it's possible to control the overall odds and payback rate on a machine, but not possible (and highly illegal) to control individual game outcomes. Regulators, casino owners, and game manufacturers go to great lengths to maintain the fairness of all games, both in fact and in perception.

Why? Because the importance of electronic gaming to the modern casino industry is enormous. Gaming devices (which include all types of electronic gambling devices, including reel-spinning slot machines, video slots, and electronic versions of live games such as poker, keno, and blackjack) account for nearly 75 percent of all casino revenues, and fill over 80 percent of the total casino floor space. It's estimated there are approximately 460,000 gaming devices in legal operation throughout North America and the annual replacement market alone runs around 70,000 units annually. Let's take a look at how the industry grew to what it is today.

Bells and Cherries: A Brief History

Slot machines first appeared on San Francisco's Barbary Coast in the 1890s. California laws of that era prohibited gambling machines that paid jackpots in money, so the games were redesigned as "trade stimulators." For example, if a lucky player lined up matching symbols on the reels, the owner of the establishment would pay the winner ten cigars. The fruit symbols (cherries, plums, and so on) used on the reels of modern slot machines originated from this scheme, as these icons once represented payouts of fruit-flavored chewing gum. It's a safe bet to assume that a dollar or two was paid out instead of cigars or gum when the police weren't around.

The main reel screen from CDS's Easy Street slot game.

The state of Nevada legalized casino gambling in 1931, thereby creating a legal American market for slot machines. Games of that era were completely mechanical, using complex collections of springs, wheels, and gears to drive the spinning reels. Mechanical games were the norm until the early 1960s, when Bally Manufacturing introduced Money Honey, the industry's first electromechanical slot machine. The game was a huge success. Computerized reel-spinning slot machines were introduced in 1981, and video-display games were introduced during this period as well. Today, virtually all legal gaming devices in the United States are microprocessor-based, whether they spin reels or blast pixels onto a video screen.

The second-level bonus screen from CDS's Easy Street video slot game.

In the early 1990s, the convergence of two events had another profound impact on the industry. First, legalized casino gaming exploded beyond its historical boundaries of Nevada and Atlantic City. Many local and state governments were looking for ways to increase tax revenues, and gaming seemed like an easy way to fill the public coffers. Riverboat casinos were launched on the Mississippi River at a pace that would have made Mark Twain proud. At the same time, new federal rulings allowed for a tremendous expansion of gaming on Native American lands. (The world's largest casino, Foxwoods, is owned by the Pequot tribe in Leyward, Conn.) The result of this surge in demand was the slot makers now had substantial amounts of cash to fuel further R&D efforts.

The PC gaming industry was experiencing a boom of a different sort during that era. "Multimedia" was the buzzword of the day, and the impact that the introduction of the CD-ROM had on the computer gaming world needs no repeating here. Forward-thinking slot manufacturers realized that a similar revolution could be carried over to their industry as well, providing the means to increase the entertainment value offered by their games drastically.

Technological Changes

Before this innovation could begin, some fundamental changes to the standard game architecture had to be made. Traditionally, gaming devices are ROM-based, with all game code, graphics, and sound residing in programmable, read-only memory modules (EPROMs). This architecture, which is still in wide use today, is rugged and has certain security advantages. The security aspect of burning all of the game control code into nonvolatile EPROMs is particularly important, given the highly regulated nature of the industry (I'll expand on this later), and the huge amounts of money that can be at stake. Nonetheless, this architecture has all of the inherent limitations that are associated with classic coin-op arcade games. Most EPROM-based system boards operate at very slow clock speeds, support only a limited amount of memory, and have basic graphics capabilities at best (typically 4-bit color).

Programming tools for these platforms are typically limited to simple DOS-prompt linkers and C compilers. As such, it is difficult to enhance the player experience significantly within the constraints of this environment. The challenge was to develop a new platform that could still provide the security and reliability of an EPROM-based game, and at the same time allow for vastly improved graphics, sound, and interaction.

Several "banks" of CDS Easy Street slot machines with accompanying signage.

The industry took several different approaches to this challenge. In 1997, the state of Nevada approved a new platform based on PC-style hardware (all gaming devices must pass regulatory muster before they can legally be offered for play). This device utilized a Pentium processor, a hard disk, and a full-color graphics subsystem to deliver content. All game code and media assets were encrypted and stored on the hard disk, which was jumpered to prevent unauthorized writing to the drive. While the games offered on this platform were traditional (slots, video poker, and video keno), the increased graphics capabilities, professional-quality animation, and high-caliber sound offered a considerably modernized playing experience. However, many gaming jurisdictions perceived problems with the security of this architecture, and further approvals were slow in coming.

A more rounded approach was later developed by my employer, Casino Data Systems (CDS), which keeps all game control functions (the code which controls random number generation, win decoding, money handling, security, and accounting functions) in EPROM and utilizes a PC-based system for storage and execution of the multimedia functions only. With the platforms in place, titles could now be developed which took advantage of the increased capabilities.