Gamblers in the saloons and brothels of San Francisco in 1895 dropped a nickel into the coin slot of the Liberty Bell and pulled a spring-loaded lever to start three mechanical reels. If the cylinders stop with three bells aligned in the glass window – the top prize, at odds of one in a thousand – the lucky contestant will win 50 cents.
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Charles Fay, the Bavarian craftsman who invented the device, would hardly have recognized the descendants of the Liberty Bell. More than a century later, slot machines, which have become the most popular form of casino gambling, are sophisticated computer-controlled devices.
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Some retain rudimentary levers, a nostalgic nod to the days of the one-armed thug. But the coins no longer drop into the hopper; winners are paid with a bar-coded ticket, and the machine’s speakers mimic the jackpot bell. Microprocessors and random number generators determine the result. Real bobbins are replaced by digitized “virtual” ones.
Advanced slots are more reliable and resistant to damage than their mechanical ancestors. The versatility of a computer means faster, more exciting games and the possibility of bigger payouts.
But critics say these machines are also more misleading and manipulative — programmed to exploit gambling myths and encourage players to keep spending by baiting misses, losses disguised as wins, opaque odds and other strategies. Under US and Canadian gambling regulations, the tactic is perfectly legal. They can also contribute to the fact that some gamblers are hooked.
“Before virtual reels, you couldn’t get big jackpots,” said Kevin Harrigan, a computer scientist at Canada’s University of Waterloo who studies slot machine design and how it affects people. – If you could manipulate the odds – which I would argue that almost every part of it is a fraud – that’s when everything changed.”
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Players bet on the probability of an event – in the case of slots, this is the appearance of a matching set of symbols, such as three cherries or five Tony Soprano pictures, on the slot’s “payline”. The number of reels and the number of symbols on each reel determines the bettor’s odds.
The original Fey Liberty Bell had three drums, each with 10 symbols (including one bell). Each symbol had the same probability as the other to land on a payline. So the odds of winning were not bad: 10 x 10 x 10 = 1000 possible symbol combinations and a one in a thousand chance that three bells would line up on a given spin.
However, to attract serious gamblers, casino operators needed to offer bigger jackpots than the Liberty Bell’s two-bit payout. And to avoid losing money with such large jackpots, they needed to reduce the odds of winning by making the jackpot more difficult. So, mechanical slot machine manufacturers started adding more symbols (and spaces) to the reels.
Characters and spaces together are known as stops. Adding more stops increases the chances of the reel stopping on a blank, losing or low-paying symbol. A player playing the 22-stop, three-reel mechanical slots common in the early 1970s had a 1 in 10,648 (22 x 22 x 22) chance of winning the top prize in a single spin.
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But the tactic had a physical limit. To fit more symbols on the reels, the symbols had to get smaller – making them harder for the players – or the reels had to get bigger – resulting in a bulky machine.
Another approach, increasing the number of normal-sized reels to four or five, dramatically reduces the probability of a win without creating a problem with the place. However, players abandoned the higher-reel machines because they correctly felt that their odds were much worse than the three-reel models.
With the rise of computer technology in the 1980s, Norwegian mathematician Inge Thelnes came up with a brilliant, if tricky, solution. In 1984 he
A revolutionary invention that allowed standard-sized, three-reel slot machines to offer the big jackpots that players wanted, with the big odds that casinos wanted.
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Telnaes accomplished this feat by creating phantom “virtual” reels in the slot’s computer memory. Virtual reels are invisible to gamblers. They have more stops – often dozens or hundreds more – than the physical reels that players see spinning on the face of the machine.
The discrepancy between the few stops on the “real” reels that players can see, and the large number of stops hidden from view on the virtual reels, gives the impression that the odds of winning are much better than they actually are.
There can be four cherries among the 22 stops on the real reel, which means that the probability of a cherry appearing on the payline is 4 in 22. But if the virtual reel has 64 stops and two “real” cherries, t is associated with any virtual stops reels, then the odds are actually 2 in 64.
The computer randomly stops the virtual reels, so the game of the slot machine is still technically random. But it’s clear that Telnaes’ approach is aimed at misleading slot machine enthusiasts. As he candidly noted in his patent application, “it is important to create a machine that is assumed to give a greater chance of winning than it actually does, within the legal constraints that games of chance must operate.”
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Many of the new all-digital slot machines have animated reels rather than real ones, but they still use the basic Telnaes strategy: using visual displays that show better odds of winning than they actually are.
In the 1980s, when the Nevada Gaming Commission was deciding whether to allow virtual reel slots in the state’s casinos, several slot manufacturers raised concerns, according to meeting minutes reviewed by Harrigan.
A Bally chief worried that players were being “misled”. Corporate lawyer International Game Technology told gambling regulators that a jackpot symbol that “appears four times more often to [a player] than their computer actually sees” amounts to “false advertising”.
The IGT man is also concerned about the implications of slots programmers using virtual reels to indirectly cause “near misses”. At this point the spin stops with the jackpot symbol just above or below the payline, prompting bettors to try again.
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Whatever their misgivings, the companies recognized the potential good of virtual drum machines and promised that if Nevada regulators approved them — which they did — they would offer their own versions. In fact, IGT bought the rights to the Telnes invention and licensed it to other manufacturers.
Slot machines eventually overtook table games as the primary source of gambling revenue. In 2009, the average Las Vegas Strip casino earned more than $307,000 each day from slot machines, 24 percent more than table games.
Nevada gambling regulators, for their part, rejected the idea of requiring slot machines to show odds of winning. As the commissioner at the time, Richard Hite, reasoned, it would “take away the mystery, the excitement, the fun and the risk of the game”.
Also, “there is no institution that would agree to post these odds,” Hite observed, perhaps forgetting that the gaming commission had the power to compel such action if it chose.
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, revealed other methods that slot designers and casino operators use to keep players on the machines.
Video slots allow players to place multiple bets on how the winning symbols can line up on the screen when the spin stops – horizontally, vertically, diagonally like tic-tac-toe, or even in crazy W-shaped curls.
The winnings on some of these multi-line bets may be less than the player’s total bet. Technically, this is a loss: if a player bets a dollar amount of credits and wins 75, he loses 25 cents. But the machines are programmed to react as if the player has won a profit, with graphics flashing, bells ringing and the like. Harrigan calls this effect a loss disguised as a win.
In Canada, where provincial governments operate casinos, Harrigan used the Freedom of Information Act to obtain design documents for a slot machine called Lucky Larry’s Lobstermania. He found that when players bet on a maximum of 15 lines, they were much more likely to experience losses disguised as wins than actual wins.
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The documents also revealed that Ontario gambling regulators have approved nine different versions of the Lobstermania slot machine. All slots looked the same, but differed in their “payback percentage” – the portion of a player’s bet that, on average, the machine is programmed to return. The identical-looking machines had a payback percentage of 85 to 98 percent, meaning casinos kept 2 to 15 percent of the stakes.
In principle, there is nothing surprising or unpleasant about percentages of payback, also known as “retention”. Casinos are in business to make a profit, and the American Gaming Association, the trade organization that represents them, goes to great lengths to state that the house always has an advantage. State gambling regulations, including Ohio’s most recent one, allow slot machines to be up to 15 percent. It’s also not uncommon for regulators to allow casinos to have the same machines with different contents, as Ontario