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History of Slots

The game of Slots has a brief history. The actual origin of the current electronic version is not clear, but records indicate that players were feeding the Slots and being paid in coins as early as the 1890's. At first, the term ‘slot machine’ was used for coin-operated, automatic vending machines. Then, sometime later, as games of chance started gradually appearing, the term was also meant to include various types of gambling devices. Early in the 20th century, the term was used exclusively for gambling devices.

The first known slot gambling devices in the US consisted on mere novelties that did not return any coins but offered gambling opportunities. There were some with small mechanical horses on top of the machine, which would race after a coin was inserted into the slot. Club owners would set such devices on the bar where players would insert a coin in the slot, as an initial deposit, to be able to wager on the outcome of a horse race. The house would keep all coins fed into the slots, and the players would settle bets among themselves.

By 1892, someone got the brilliant idea that money could be made off of these devices, and they rigged up a system that would keep the majority of coins and pay off small coin jackpots. These machines were usually made in a circular shape with a spinning indicator that pointed to a particular number, color or picture, when it stopped moving.

In the early 1900's, the design of the slot machine improved, and eventually, the three-reel version was adopted as the standard version. The three-reel design included an operating handle, a cup or trough for winnings, a slot, and a window showing the coins which had been played and the jackpot or highest payout.

Several groups in the US, especially those concerned about the moral and legal issues surrounding slot machine operations, openly opposed to them. As a result, many operators turned them into fake vending machines, which paid off in candy, gum or tokens that could be exchanged for free drinks. Others stuck to the original format. When a player would win, the machine would play a little tune and pay off in coins.

Throughout the 1920's, slot machines remained popular in much of USA, especially in resort areas, and continued to be popular even during the depression years, the dirty thirties. During that era, it was widely believed that organized crime was behind the distribution and control of the slot machine industry, so they enacted some legislation prohibiting their sale, use, or transportation, with the exception of private social clubs. Prohibition outside Nevada, which had already legalized gambling in 1931, was implemented in most of the US territory by 1951, even though illegal operation in private clubs still was generally ignored.

Later, as other countries and other states started legalizing gambling, motivated by the prospect of substantial revenues, slot machines came into wide use in casinos and elsewhere throughout the world. Enterprising US casinos and private companies had a substantial segment of the market by then. By the late 1970's, electronic slot machines with push-buttons and visual displays were already being used.

The slang term “one-armed bandit” derives from the single mechanical operating handle or arm that is attached to one side on most modern machines, and also from the fact that the house can and does adjust payout rates to suit their percentage take. It is a generally accepted practice for a casino to decrease the payout rate in times of high volume gambling and to increase it in slack periods. Some state-gambling commissions have tried to establish a fixed payout rate.