In the early 21st century, casino operators feared that the popularity of physical slot machines in brick-and-mortar casinos would be threatened by the sudden rise of online casinos, in which customers deposited money to make wagers and played various games of chance using personal computers. Thus, the house advantage varies widely between about 1 and 50 percent depending on circumstances, such as legal requirements and competition from other casinos. The machine pays off by dropping into a cup or trough from two to all the coins in the machine, depending on how and how many of the symbols line up when the rotating reels come to rest. In the first ones, inserted coins fell onto an internal balance scale, where they might cause it to tip and spill other coins out; among later devices were ones with a circular display and a spinning indicator that came to rest on or pointed to a number, a colour, or a picture. After World War II the machines came into worldwide use as governments were drawn by the prospect of tax revenue. The term slot machine (short for nickel-in-the-slot machine) was originally also used for automatic vending machines but in the 20th century came to refer almost exclusively to gambling devices.
Prohibition outside Nevada, which had relegalized gambling in 1931, was virtually total by 1951, although illegal operation, especially in private clubs, was widely ignored. Slot machines are by far the largest profit generator for nearly every casino, averaging 30 to 50 percent or even more of total revenue. In the 1950s electromechanical slot machines allowed many new payout schemes, such as 3- and 5-coin multipliers, where the sizes of the payouts are proportional to the number of coins inserted before the handle is pulled. Video slot machines, which simulate reels on a monitor, were introduced in Las Vegas in 1975. Such machines have had limited success; for the slot-machine addict, the action of pulling the handle, the sound of the reels falling into line, and most of all the jangle of cascading coins are essential parts of the attraction. Great Britain as a fruit machine, gambling device operated by dropping one or more coins or tokens into a slot and pulling a handle or pushing a button to activate one to three or more reels marked into horizontal segments by varying symbols.
The first slot machines in the modern sense were invented by Bavarian-born American inventor Charles August Fey, at the time a mechanic in San Francisco, who built his first coin-operated gambling machine in 1894. The following year Fey built the 4-11-44 in his basement; it proved so successful at a local saloon that he soon quit his job and opened a factory to produce more units. By the time San Francisco banned them in 1909, there were some 3,300 slot machines in the city. The Liberty Bell proved immensely popular among saloon patrons in San Francisco and was quickly copied by Fey’s competitors, such as the Mills Novelty Company of Chicago. Chiefly because of the 1906 San Francisco earthquake, only 4 of more than 100 Liberty Bell machines built by Fey survive. By 1888 machines that paid off in coins were in existence. The Mills Novelty Company also invented the “jackpot” in 1916, whereby certain combinations of symbols on the reels regurgitated all the coins in the machine.
The idea was copied in the following year by the Mills Novelty Company, which added on their reels a picture of a chewing gum pack (soon stylized as the well-known “bar” symbol). The Card Bell had a handle that set the reels in motion when it was pushed down and playing card suitmarks that lined up to form poker hands. His next slot machine, the Liberty Bell, was built in 1899 and used horseshoes and bells as well as playing card suitmarks on the reels. But knowledge that the distribution of slot machines was often controlled by organized crime led to increasing legislation restricting their sale and transportation as well as their use except in private social clubs. Modern slot machines contain solid-state electronics that can be set for any desired frequency of payouts. In 1898 Fey built the Card Bell, the first three-reel slot machine with automatic cash payouts.
