THE MODERN WORLD FOR SLOT MACHINES

The twentieth century saw gambling in the United States go from cigar stores and bars to legal casinos in Nevada. The slot machine industry changed with it. Before and during Prohibition the market was decentralized and slot machines could be found in bars, cigar shops and other places where men congregated all over the country. By the 1960’s, it was concentrated on serving the casino industry in Nevada and the handful of other jurisdictions (Montana and a few counties in Maryland). Slot machines would still end up in ‘underground‘ casinos but they would get there in roundabout fashion and not directly from the increasingly more legitimate slot machine industry.

The Mills Novelty Company didn’t fare particularly well in the new world of corporate casino gambling. By the end of the 1940’s it was in financial disarray and ceased being a ‘player’ in the gaming equipment business. It diversified its products and for a time found some traction in the manufacture of jukeboxes. Although the Mills name would live on until the 1980’s in one form or another it was after countless rounds of acquisition, mergers and reorganization. By the 1960’s, there was a new powerhouse in the gaming equipment business.

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BALLY MANUFACTURING RULES THE INDUSTRY

Chicago based Bally Manufacturing was a name well known to pinball (and later video game) enthusiasts but their main source of profits was slot machines. The company gained greater control of the industry as smaller competitors were unable to keep up with their innovations and ‘economies of scale’ manufacturing methods. By the 1970’s, their grasp on the casino gambling industry was incredible-by 1978 (the year that Atlantic City legalized gambling) Bally had cornered about 90% of the slot machine industry. This was the ‘high water mark‘ for their industry dominance as ever-improving technology brought new companies and drove down manufacturing and design costs. In the coming decades, a wave of gambling legalization would sweep over the country and Native American tribal gambling would go from bingo halls to casinos. The market would grow and there would be more business for everyone.

The years of Bally’s domination of the slot machine industry saw a massive amount of innovation that helped shape these devices into what we know today. In 1964, Bally released a new machine called Money Honey that introduce multiple innovations. It was the first ever electromagnetic slot machine, used advanced sound effects and was the first multiple coin machine. It was also the first slot machine to have a hopper–the metal ‘holder’ where coins drop when paid out. This machine was powered by electricity, and also possessed new sound effects as well as being classed as a multi-coin machine. Heading into the 1970s, Bally introduced games with bigger hoppers, taking more coins and adding more reels. About this time they designed the first slot machine to use $1 coins.

TECHNOLOGY STARTS TO CHANGE EVERYTHING ALL OVER AGAIN

The next big market in the US gambling industry was Atlantic City. The New Jersey seaside resort town legalized gambling in 1978 and although it would ultimately be crippled by overregulation, mismanagement and growing competition for a while it was a huge hit. Bally continued to produce slot machines and to create more innovations. It continued to add more reels to machines and increased the number of symbols on reels up to 25. They also created the first ‘high dollar‘ real money slot machines that could be played at $5, $25, and $100. At this point, players didn’t concern themselves with payout percentages so the more reels and symbols they added the harder it was to win.

Bally also created what might be the biggest innovation in gambling machine history. They hired a computer programmer named Inge Telnaus and tasked him with creating larger jackpots that would be attractive to the player without increasing the ‘downside risk‘ to the company or casino. Telnaus would create the first computerized random number generator for use in a gaming device. This device continually randomized where the reels stopped and opened a ‘Pandora’s box’ of innovative gaming technology that continues to grow and develop today.