Relative to the long history of gambling, slot machines are a new creation. They are a modern vehicle for people to risk money in the hopes of winning much more.
Where did the idea for the slot machine come from? And just how did the quintessential gambling device come to be the most common thing in today’s casinos? Though slots number somewhere in the hundreds of thousands in Las Vegas, and in the millions across the United States, slot machines were once an unlikely candidate for that kind of omnipresence.
Where it all started for slot machines
Charles Fey, a Bavarian-born mechanic and machinist, is generally credited with inventing the first slot machine at the end of the 19th century in San Francisco.
He solved a problem in the slot machine’s precursor by simplifying the design. He also created a structure for automatic payouts. In the 1890s a popular gaming machine existed with cards where players would insert a nickel (comparable to $1 today). They would then try to make a good poker hand from the drum of cards.
These machines were novelties in some bars, but they weren’t intended as full-fledged gambling devices. Since there was no mechanism for automatic payouts, each establishment had its own prizes and prize structure. Often they would load 50 cards, instead of the full 52, into the machine to create an inherent house advantage, usually to make getting a royal flush less probable.
The first gambling machine that we would recognize as a precursor to the modern slot machine was invented in Brooklyn, New York, by Sittman and Pitt. This five-reel drum held fifty card faces and was based on poker ranks. This tradition continues today, with the majority of online slots featuring A, K, Q, J, 10 and 9 symbols on their reels.
In 1899, Charles Fey of San Francisco devised a much simpler three-reel game. It had an automatic mechanism to pay out all possible winning combinations. Known as the Liberty Bell, it proved an immediate hit.
Early Electromechanical Slots
Bally invented the first fully electromechanical slot machine in 1963. (And is still a major casino game manufacturer today.) Money Honey was the first machine able to give automatic payouts of up to 500 coins without human assistance.
Nowadays, the majority of slot machines are electronic video slots. Fortune Coin Co. is known as the father of these games. This became the de facto standard for slot machines around the world, and was expanded upon throughout the decades.
In the mid-1990s, machines with a bonus round consisting of a different mini-game within the slot began to become popular. These would be the basis of the feature rounds that are standard in online slots today.
How many slots machines are there?
A recent report from the UNLV Center for Gaming Research details the prevalence of slot machines from 1963 to 2016.
In 1963, there were just over 22,000 licensed slot machines in Nevada. Peaking at the turn of the 21st century, Nevada had over 217,000 slot machines. To put these numbers in perspective, there were about 15 times as many slot machines as all games and tables (blackjack, roulette, craps, poker, gin, etc.) combined in 1963.
By 2001, this ratio had grown by multiple of almost 33. In the modern era, you could find slots on bar-tops and in grocery stores across Nevada. In brick-and-mortar gambling establishments, slot machines are by far the dominant gaming device. Now, how will this change in the future with the use of mobile technology?
How much money do slot machines make?
One would correctly infer that if the ratio of slot machines in casinos over time has changed, so has their impact on a gaming establishment’s revenue model.
In 2016, nearly two-thirds of Nevada gaming revenue came from slot machines. That’s a monthly average of around $600 million of the total $950 million statewide. As recent as 1984, slot revenue represented 53 percent of total gaming revenue in Nevada. In the 1950s and 1960s, slot revenue represented an even smaller portion of total gaming revenue.
In some, if not most, jurisdictions, slot revenue contributes the majority share of gaming revenue.
There are many racinos across the US. Racinos are gaming establishments traditionally within race tracks but have added slot machines and sometimes live poker. Jurisdictional regulations prohibit blackjack, roulette, craps, or other house-banked table games.
Furthermore, one could claim that as horse and greyhound racing loses its popularity, slot revenue becomes even more valuable. As these venues attract unfamiliar gamblers with offers of dining and live events, such as concerts and shows, chances are greater that a guest inserts a bill into a slot machine as opposed to sitting down at a live poker table or making a race wager. Sticking currency into a machine and hitting a button is a lot less complicated to a novice than making a race wager.
The UNLV Center for Gaming Research studies the popular racinos in Florida. At Pompano Park, located in Pompano Beach, the racino saw revenue (excluding over $2 million in promo credits) of over $147 million in the month of November alone.
Net revenue, the dollar amount retained by slot machines after jackpot payouts, for November was $10.9 million. The hold percentage for the month was 7.4 percent. This is nine-tenths of one percent higher than the state average. With a modest gaming floor (slots downstairs, live poker and race windows upstairs), the slot machine revenue surpasses the revenue of race wagering and live poker combined.
Different kinds of machines used in land-based slots
There are, broadly speaking, two different types of slot machines: Class II and Class III. The latter are “Vegas style” machines. They work with a Random Number Generator (RNG). These are the most common type of slot machine you’ll find in most commercial casinos.
Class II machines are also known technically as “Virtual Lottery Terminals” (VLT) and are pre-programmed.
The key difference is that a Class III machine is constantly generating random numbers. The number generated upon a player hitting “spin” will determine whether or not that is a winning spin.
A Class II machine, according to the 1988 Indian Gaming Regulatory Act, is designed to simulate the mechanics of the game of bingo. Over time, these games have evolved to look and act much more like their Class III counterparts. In fact, it can be difficult for the casual slots player to tell the two apart.
Slots at tribal casinos in the US
A further option available to American casino fans is to play slots at tribal casinos located on Native American reservations and tribal lands. Thanks to tribal sovereignty, these casinos and gambling venues are rarely restricted by the state in the same way that commercial casinos are.
For many gamblers in the US, the nearest casino venue is on a Native American reservation. There are actually more gambling operations run by Native American tribes in the US than there are commercial casinos. There are 460 gambling operations run by more than 200 tribes across the country. These represent a significant gambling economy in the tens of billions.
Typically, you’ll find Class II slots at tribal casinos. This means that the machine has a pre-programmed payout structure determined by a hidden bingo game. (As opposed to the Class III slot machines that use a Random Number Generator to determine wins.)
Why are there so many tribal casinos?
Tribal casinos are commonplace across the country largely thanks to the 1988 Indian Gaming Regulatory Act. This act provides legislation and protection for the operation of gambling on tribal land as a means of income for Native American tribes.
The act aimed to promote tribal development and self-sufficiency as a by-product of Native American income. The latest statistics show that the tribal casino industry generates over $6 billion in annual revenue for 240 of the 565 federally recognized tribes in the US.
However, 12 percent of the casinos generate two-thirds of this revenue, largely those located near large metropolitan areas.
The biggest tribal casinos in the US
The Foxwoods Resort in Connecticut is the biggest tribal casino in the country. It covers an area of more than 9 million square feet on the Mashantucket Pequot Indian Reservation.
The hotel boasts over 2,600 rooms. The casino floors hold nearly 400 gaming tables. Foxwoods has over 4,700 slot machines, which means that you’ll certainly be able to find a game that suits you!
Foxwoods’ neighbor, Mohegan Sun, is the third-largest casino in the US and the second-largest tribal casino. It boasts more than 5,300 slot machines. This makes it by far the largest collection of land-based slots in a tribal casino.
Slots at land-based casinos in the US
The vast majority of land-based casinos in the US, and indeed around the world, will feature far more slot machines than any other type of card game or table game. Slot machines typically make up around 70 percent of the income of an average US casino.
Casino slot machines in the US
Wagering on games of chance has been part of American culture ever since the first European settlers arrived in the original colonies. The birth of legalized gambling in Nevada came in 1931, when Assembly Bill 98 became law.
Today, there are over 1,500 casinos operating in the United States. Las Vegas, Nevada and Atlantic City, New Jersey act as the two hubs of US land-based casinos. Of these, roughly 450 are privately-owned commercial casinos that operate on non-Native American land.
There are 20 states that allow commercial casinos to operate, including Nevada and New Jersey. Despite these restrictions, the gross gambling revenue of land-based casinos in the US (excluding Native American casinos) is in the tens of billions year after year.
Other slot machines in the US
Outside of commercial casinos or tribal casinos, you may find slot machines at other entertainment venues such as racetracks or adult-orientated arcades. Whether or not slot machines are allowed outside of casinos varies from state to state.
Gambling law in the US is somewhat complicated. Gambling is federally legal but its enforced differently from state to state. This applies even more for privately-owned slot machines, which are either commonplace or highly restricted (or even totally banned) from state to state.
Privately-owned slot machines are legal in some form in all states save for Connecticut, Hawaii, Nebraska, South Carolina and Tennessee. In Alaska, Arizona, Arkansas, Kentucky, Maine, Minnesota, Nevada, Ohio, Rhode Island, Texas, Utah, Virginia and West Virginia, all types of slot machines are legal.
In all other states, restrictions on slot machines are based on either age or type of machine.
How do slot machines work?
Slot machines are very simple, which is why they are so popular at land-based casinos and online casinos.
To play, you first select how much you want to wager and then spin the reels. Typically, you must match two or three or more symbols in a row to score a win. Generally, there are a number of different ways to win, known as paylines, and various symbols that will award different prizes.
You’ll be able to see the value of the different symbols on your game of choice by consulting the slot paytable.
Paylines refer to the order in which a set of symbols must fall in order to pay out a winning combination. In most cases, this must be at least three matching symbols from left to right, starting on the first reel.
The simplest fruit machine slots may have a single payline running across the middle of the reels. So, on a three-reel slot on which each reel displays three symbols, the payline will be a straight line from left to right. If you hit a three of a kind on the middle of the reels, you win.
In online slots, you’ll find the majority of games have at least 20 paylines and often many more. This is because the paylines in online slots do not necessarily run straight across from left to right. In many games, paylines will still run from left to right but via all sorts of paths. A winning payline might zig-zag over the reels or form a V shape. Some games pay in any direction and have over 1,000 ways to win!
You’ll be able to find out the number and shape of the paylines by accessing the paytable menu. Many games have fixed paylines. This means you must bet on all of the paylines. Some, however, allow you to bet on any number of paylines from one up to the maximum bet.
Wild symbols and scatter symbols
As well as the regular symbols you see in an online slot, there are also special symbols. These are wild symbols and scatter symbols.
Wild symbols act exactly like wild cards in certain poker games. They take the place of any other symbol. This means that four consecutive symbols followed by a wild symbol counts as a five of a kind win rather than four of a kind.
Scatter symbols typically pay out higher than average wins for three of a kind or higher, and can often pay a win for just one or two symbols. They usually pay scattered, which is where they get their name. This means that they don’t necessarily pay out from left to right and don’t have to start their winning payline combination on the leftmost reel. Often, a set of scatter symbols will launch a feature round.
Feature rounds, or bonus rounds, are the best part of online slots gameplay in the eyes of most online casino players.
That’s because it’s in the feature rounds where you can make the biggest profits. Typically, feature rounds will award prizes many times higher than ordinary payline wins during regular slots spins.
A feature round may take one of the following forms:
- Free spins: you receive a free spin, receiving a predetermined number of risk-free chances to score payline wins.
- Pick and win: you are presented with a series of blind choices. You choose from a number of prizes including multipliers, instant wins and other bonuses.
- Instant win: you immediately receive a cash prize.
- Re-spin: your last spin will get a “do-over,” often with additional parks.
- Mini-game: you play an interactive game to win prizes. This may be skill-based, chance or a mixture of both.
Feature rounds, especially re-spins and free spins, may also feature additional incentives. These include winning combinations being held and extra wilds added to the reels.
Progressive jackpot slots
The biggest online slots prizes and slot machine wins pay out via progressive jackpots. Progressive jackpots are so called because a jackpot is progressively added to with each wager made by players. Often, especially online, several or even dozens of machines are hooked up to the same jackpot.
Each wager adds to the jackpot until it’s triggered. Then one lucky player wins it all. At the time of writing, the largest online slots jackpot win in history is $19.6 million. The largest land-based slot win was in Las Vegas in 2003. An anonymous Los Angeles gambler won over $39.7 million.
Payback refers to the average percentage return gamblers can expect to see on their slot play.
In Nevada, the law requires slot payback percentage to be 75 percent or higher. Because of the competition in much of Nevada, slot payback percentages are rarely below 90 percent.
In Arizona, where tribal gaming establishments are the only places to find legal slots, casinos must maintain a minimum return of 80 percent.
The Seminole tribe dominates gaming in Florida, and similar to in Arizona, the tribe does not release payback information on any of their gaming machines. Applied to the dozens of non-tribal establishments, Florida regulations require all gaming machines to payback a minimum of 85 percent. Most of these racinos, like Pompano Park, Gulfstream, Casino Miami, or Mardi Gras all return 90 percent or more on average throughout their respective properties.
Payback gems are typically found in small places. Towns like Wendover or Sparks, Nevada have machines that typically payback 95 to 96 percent. Mississippi is a great destination for high percentage payback as well.
Evolution of slots
For many casual gamblers, the evolution of slot machines might feel anti-climactic, but the contrast of the slot machine of 1917 and 2017 is as great as that of the automobile.
Gamblers can wager in many multiples and denominations across a factor of 100, or even more, paylines. The nickel slot machine in 1917 took only five cents per spin. Today’s nickel slots might cost a player $40 per spin to have the potential to earn the maximum payout.
Single machines have the capability to accept a wide range of coin denominations and wager sizes. High-limit rooms in casinos around the world have slot machines where gamblers can risk $500 or more on a single spin. One can even visit a $5,000 per credit slot at the Aria and Wynn in Las Vegas.
Alas, only as a nostalgic gimmick are real coins accepted and disbursed from a slot machine. Nearly every slot machine manufactured after 1993 uses ticket in ticket out (TITO). The small ceiling, smoky depths of antiquated Downtown Las Vegas casinos are where classic slot aficionados can find a few slots with hoppers full of coins.
How to win at slots
Is there a legal, scientific way to gain an edge playing slots? Though the preconceived notion is “no,” that programming makes the games random and unbeatable, this is not the complete story.
Slot machines with a progressive payout structure — jackpots that increase with coin-in — are either programmed to have to hit at a certain value or they increase in value indefinitely until someone hits the respective jackpot.
What does progressive play mean for slot players? As progressive values increase, house advantage moves in favor of the player. A progressive machine with a base payback of 94 percent may become a 98 percent machine if the progressive is high enough. In a few rare and special cases, progressives can get high enough to turn a slot machine into a neutral expectation (100 percent payback) game – or even a positive proposition for players.
Having an edge
Though slots are not typically thought of as a form of gambling where a player can have an advantage, slot clubs or players cards, essentially casino loyalty programs, are the key to player advantages through promotions, cash back, comps, and other perks.
Think about finding a special machine with progressives high enough where the casino does not have an advantage. Or if they do, it is only a few one-hundredths of a percent.
Factor in the equity of winning a brand new luxury car in a drawing, earning comps for free meals and hotel rooms, cruises, and other luxuries with real cash value. Some loyalty programs may even convert points earned from slot play into real cash at an advantageous rate. Add in all of these conditions, and a once-negative expectation experience can become a lucrative one.
Generally, slot club or loyalty programs at casinos have tiers. This means that once the progressive jackpot hits, making the machine no longer advantageous to play, a player will retain his/her loyalty status for an extended period of time. In a corporate gaming world where single companies own several properties around the country and even around the globe, having the higher tier status continues to pay dividends.
Slot edges have changed over time with computers. An example from a few decades back is card pulling. A player could wait until the reels lined up in a way that opens up a bonus round of sorts — digital extras that award free games, free spins, or other chances to win without having to pay for additional movement of the machine and then pull their players card from the machine.
These cards keep track of coin-in and wins and losses. Casino management and marketing view these to determine the value of a patron to the casino. A player’s goal is to appear to be a bigger loser in hopes of preferential treatment from casinos.
Technology at the time would often register that the player spent the money to spin the machine. However, once they pulled the card the player account would not be updated to include the result from the activity of the bonus round. Slot manufacturers have long since eliminated this opportunity for player advantage. Of course, that doesn’t mean that older versions of slot machines can’t be found.
The future of slot machines in the US
Slot machines will continue to be a cornerstone of casino gaming. The brick-and-mortar casino landscape is constantly developing to attract millennial gamblers, who appear disinterested in traditional gambling compared to their parents and grandparents.
Slot manufacturers are perpetually reviewing new ideas for added features, bonus rounds, free spins, and interactive media in order to make slot machine gaming more appealing.
The physical space slot machines occupy can sometimes be unattractive to casino patrons. For some, bells, whistles, noise, smoke, and commotion are all elemental to the gaming experience. But how much better could the casino do if they condensed the floor into a single digital network accessed by laptop, tablet, or smartphone?
They could revisit the cost of all of the square footage, hardware, and labor. Casino patrons would have a searchable directory and the capability to load any slot with any denomination from an iPad.
The precursor to this next generation of gaming exists today in Las Vegas, Reno, Atlantic City, and is rapidly growing in popular jurisdictions like Florida. Slot players in Las Vegas can play real-money slot tournaments daily from their mobile device simply by connecting to the property’s wifi. In jurisdictions where regulatory bodies have not yet fully approved this next generation of gaming activity, players are still able to earn valuable loyalty points, free rooms, meals, and show tickets from essentially anywhere.
Online slots experience
Since slot machines are a less social form of casino gambling than poker or table games, they translate very well to the online experience.
In digital form, casinos can afford to offer more bonuses and better payback to players. Online, there is no concern about a game being unavailable because someone else is playing it, nor is there an awkward wait for a slot attendant to come by and handle every small jackpot.
High rollers and penny slot players alike will appreciate the online slot experience. Regulatory movement may be slow, but the future of slot gaming is brighter than ever.
Social casino slot machines in the US have become a major industry in their own right, despite many of the most popular social slots not giving out real world rewards.
The explosion of social media, particularly Facebook, and the amount of social gaming apps available on these platforms, meant that social gaming was a natural step to take for the online casino industry. Zynga Poker, for example, absolutely dwarfs the biggest real-money poker sites in the world despite only being available for play money.
Many social gaming companies operate entirely free-to-play online slots, all of which are legal in every US state. These games are immensely popular on social media networks such as Facebook and on mobile and tablet devices.
Many players find social gaming a form of exciting, yet risk-free, gambling entertainment. Recent surveys show that more than half of all Facebook users engage in some form of social gaming. Facebook’s online poker and online slots games draw in more than 10 million players every single day.
Of this huge range of varying social slots, some have affiliations with real-world casinos. They can therefore be played in exchange for casino rewards. Many of the social slots you can play on your mobile are based on, or exact duplicates of, real-world online slots or casino slot machines that you will find in a land-based casino.
Playtika, for example, is owned by casino company Caesars. Their social casino games can reward players with points to spend at Caesars land-based casino venues.