America – The Early Years – Charles Fey and the Liberty Bell

In 1895, Charles August Fey built the first paying out slot machine, known as the Liberty Bell.  The Liberty Bell pokie machine was placed in a San Francisco saloon, the Liberty Belle Saloon & Restaurant in Reno, Nevada (where it still is to this day).  So popular was it, that Fey decided to go into pokie design and manufacture full time and started Charles Fey and Company.

This was a risky thing to do.  Namely because at that time in America, gambling and pokie machines were banned in most states.  Despite this, in 1907 Charles Fey went on to join forces with the Mills Novelty Company and create the Mills Liberty Bell slot machine with its cast iron casing and feet.

During his career Charles Fey designed numerous pokie machines some of which were; two Liberty Bells, a Klondike, Little Chief, Silver Dollar and Three Cadets.  He finally retired in 1944 at the great age of 82.  Ten months later, he died from pneumonia.  For any of you international jet-setters who want to learn more about pokie machine history, we suggest you visit San Francisco city.  Near where Market, Battery and Bush streets intersect you will find a stone marker that reads “Original Slot Machine” (great photo op. I’m thinking?!)  Also, in Reno Nevada, the Liberty Belle Saloon & Restaurant is still running and hosts the very first Liberty Bell pokie machine, along with many others designed by Charles Fey.  It is now owned by Charles Fey’s grandchildren.

The 20th Century and the Criminal Underworld

Coming into the first half of 20th Century, the American authorities were exceptionally intolerant of any so called vices, like drinking and gambling.  In 1909 San Francisco declared pokies to be illegal and Nevada followed suit in 1910.  All of the state of California then banned them in 1911.  Though the populace of America reveled in the delights of pokie machines, the governing powers could not be persuaded by their merits.  The symbols within the early machines were cards which directly and obviously denoted gambling.  In order to get around the legal problem, many pokie machines were designed, not with playing card pictures, but with pictures of fruits and sweets.  In 1910, the Mills Novelty Company brought out the Operator Bell pokie machine.  Though very similar to the Liberty Bell, it featured symbols of fruit flavours instead of cards.

Pub trivia: The use of fruit symbols on the reels in pokie machines gave rise to the British term for pokie machines; Fruit machines.  The popular cherry and melon symbols come from this machine.  The “BAR” symbol now common in slot machines was derived from an early logo of the Bell-Fruit Gum Company.   This company was one of the first to produce pokies on a large scale and masked the gambling nature of the game by dispensing a piece of gum for every pull on the lever.

By offering food prizes instead of money the makers of these slot machines hoped to get around the anti-gambling laws, by passing themselves off as vending machines.  However, they were up against hard-nosed anti-gambling sentiments in government.  Some vending and even gumball machines got embroiled in the anti-gambling frenzy of the establishment.  The following shows how tight the laws were with regards to these vending machines, so just imagine how much anti-pokie machine sentiment there must have been coming from the authorities of the day.

More pub trivia: Two cases from the American Courts highlighted the excessiveness of the state governments’ paranoia over gambling.  State vs Ellis and State vs Striggles were both cases where mint vending machines were prosecuted for being “gambling devices”.  This was because they would show the user what they would “win” in advance and they would occasionally give the user a number of tokens, to exchange for more sweets.  So it was almost like the player would deposit money into the machine in order to see whether he might be in line for getting free tokens with the next deposit of money – sort of gambling on the possibility that the next time he may get the free tokens.  The courts ruled thus:

“The inducement for each play was the chance that by that play the machine would be set to indicate that it would pay checks [tokens] on the following play. The thing that attracted the player was the chance that ultimately he would receive something for nothing. The machine appealed to the player’s propensity to gamble, and that is [a] vice”.

Despite the anti-pokie laws and sentiment, the industry continued to grow.  From around 1915 the cumbersome design and weight (around 100 lbs) of the original machines were gradually replaced by less expensive and lighter wood cabinets.  The Mills Novelty Company continued to grow in the 1920s and 1930s and came out with more new 3 reel slots.  These became known as Silent Bells, because they were quieter than the original pokie machines and they also offered double jackpots.  They were more colourfully designed than before and carried distinct themes.  In 1931 they brought out the Lion Head, then the War Eagle and the Roman Head and in 1933, the Castle Front.

In the 1930s in New York, the Mayor, Fiorello La Guardia (the Airport’s named after him) waged a war on the Italian Mafia and gambling.  Fiorello was frustrated by the Italian gangsters within the community and one of the first things he did after being sworn into power was to order the arrest of Lucky Luciano, the infamous Mafia boss.  Then in 1934 he went after the Mafia boss Frank Costello’s slot machine racketeering business by collecting thousands his pokie machines, swinging a sledge-hammer into them and then famously dumping them all into the sea amidst a flurry of press and photographers… the days of political spin-doctoring have long been around!

Throughout the 1940s, slot machines gained further popularity and notoriety thanks to Bugsy Siegel, the notorious organized crime boss.  Siegel filled his hotel, the Flamingo Hilton, with pokie machines to occupy the time of the high rollers’ girlfriends and wives.  Though he did this as a diversionary side-line to keep the ladies happy, he soon became aware that they provided serious revenue.  Since then, pokies have become a staple in casinos and gambling boats around the world, providing from 60% to 80% of any land-based casino’s revenue!

In 1951 the American Congress passed the Transportation of Gambling Devices Act, which should have suffocated the pokie manufacturing industry in America.  The act, nicknamed the Johnson Act, prohibited the movement of any “gambling device” or “constituent parts” for a gaming device, to any state where it was prohibited by law.  This essentially meant that the only state where slots or parts for slots could be transported to was Nevada, which, (since 1931), was the only state in the U.S. where gambling was legal.  The manufacturers and transportation companies for such products had to register annually with the US Justice Department, and products had to be marked up with their destination.  Pokies were directly linked to this law as the “gambling devices” were nominated to include;

a)    “slot machines or any other machine or mechanical device an essential part of which is a drum or reel with insignia thereon, and
(I) which when operated may deliver, as the result of the application of an element of chance, any money or property, or
(II) by the operation of which a person may become entitled to receive, as the result of and also

b)    any other machine or mechanical device (including, but not limited to, roulette wheels and similar devices) designed and manufactured primarily for use in connection with gambling, and
(I)  which when operated may deliver, as the result of the application of an element of chance, any money or property, or
(II) by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property; or
(III) any subassembly or essential part intended to be used in connection with any such machine or mechanical device, but which is not attached to any such machine or mechanical device as a constituent par

Despite the Johnson Act, the pokie machine industry continued to grow.  A great part of that growth is due to the advent of the electro-mechanical pokie machine.  Originally pinball manufacturers, the Bally Manufacturing Corporation, began developing pokie machines in the 1930s under the guidance of the founder Raymond Moloney.  By 1964 they had developed the first fully electromechanical pokie machine called Money Honey, with and electrical circuit board.  The new electromechanical approach allowed Money Honey to be the first slot machine with a bottomless hopper, automatic payout of up to 500 coins, (without the help of an attendant) which also accepted dollar coins.  This invention marked a massive turning point in the history of the pokie machine.  The majority of manufacturers now abandoned the simplistic design of the Liberty Bell with its basic compressed spring design.

The 1970’s saw the first foray into Video Poker, or video pokies.  Video pokies were first brought to the market in 1975 by Walt Fraley in Las Vegas.  The design of the first one, the Fortune Coin, was simple.  It had a solid state logic assembly, a television screen and a hopper.  But it took a long time for it to settle into the market.  Because people couldn’t see any actual reels, they didn’t trust the machine.  Silcoma, a company which would later become known as International Game Technology (IGT), began mass producing video pokies and are today are one of the biggest international players in the pokie machine industry.

The 1980’s saw a major revolution in pokie machines with the development of the first Random Number Generators (RNGs) and the insertion of microchips into pokie machines.  Machines became cheat-proof because the Random Number Generator (RNG) meant that there was no pattern to where the reels, or the virtual reels, would stop.  The origins of the RNG can be traced back to Inge Telnaus, a computer technician for Bally Manufacturing.  Telnaus’s invention became known as the Virtual Reel System, an invention which enabled the use of a much larger number of symbols, thus making the pokie machines not only more interesting from a player’s perspective but also enabling the random generation of results.  Suddenly, pokie machines were able to become a lot more interesting to players and casinos alike.

The mid to late 1980’s also saw the development of customer loyalty programmes for pokie machine players, first in the casinos, and then in the online sphere.  With the development in electronic computing software manufacturers were able to develop tracking systems that helped identify players that were playing pokie machines.  Customers were tracked and offered various incentives to reward them for their loyalty.  Incentives ranged from free accommodation to free meals as well as free credits.  Today, major manufacturers have complex customer loyalty software programs which assist them in maintaining their customer loyalty.  Two popular systems are Aristocrats ‘Oasis’ system and IGT’s ‘Integrated Gaming System’.

Bally Technologies Inc (the Bally group as a whole, as opposed to the slots manufacturing arm, Bally Gaming) continues to provide innovative software, games and machine development.

In 2008 they brought out the reel spinning stepper Cinereels TM – which was the first pokie in history to offer 7 electro-mechanical reels.  The platform’s “micro-stepping” technology includes a Reel-Stop TM function, where the player controls exactly when all the reels halt and it’s based on the award-winning CineVision TM  widescreen gaming platform.  In 2009 they are still at the forefront of the industry; in late May they announced the expansion of their stepper and video slots games supporting ALPHA Elite™ V32 cabinet.  They are bringing out the “Playboy Platinum” and three new Power Progressive Platinum™ video slot games; “Double Wild Rose”, “White Gold” and “Rich and Famous”.  Around the same time they signed a non-exclusive agreement with Ainsworth Game Technology Ltd to host Ainsworth’s traditional Class III video slot content on Bally’s ALPHA Elite V20 and V32 game cabinets.  This is the mark of a truly great company, unphased by the economic downturn affecting much of the global markets.

Video Poker Machines, Progressive Pokie Machines and The Bonus Game

Two big names in the latter part of the 20th Century in the pokie machine industry are Stanley E. Fulton and William Silas (“Si”) Redd (the Slot Machine King)..

Fulton’s basic timeline looks something like this;

•    In the late 1970s Fulton founded The Fortune Coin Company, which developed and released the predecessor to the video poker machine, the video bell slot machine, in 1975.  It received limited success
•    Bally converted it to a draw poker machine, a poker game with a black and white television screen, a year later.
•    In 1977, Fortune Coin brought out the colour version Bally’s poker machine.
•    Fulton sold Fortune Coin in 1978.
•    After helping to make one of Nevadas most profitable gaming routes for Gaming and Technology Inc. (now known as Alliance Gaming Corporation, where Fulton eventually became chairman), he went on to start Anchor Coin in 1991.
•    In 1993 Anchor Coin became Anchor Gaming upon merging with Global Game Distributors.
•    Anchor Gaming then went bought out Powerhouse Technologies.
•    Stanley Fulton left Anchor Gaming in 2000
•    IGT bought out Anchor gaming in 2001 for $1.37 billion.

Meanwhile, Si Redd’s timeline went something like this;

•    In the 1960’s Redd founded the affiliate company, Bally Distribution Co, to supply casinos with pokie machines.  He retained 70% of the stock in the company, which he rapidly expanded and he soon earned the reputation of being the “Slot Machine King”.
•    In 1975 Redd sold his shares in Bally Distribution Co to Bally Manufacturing, minus the electronic games rights (which included the video pokie machine rights).
•    He kept the rights for these machines and upon acquiring the video game manufacturer Nutting Enterprises, set up a new company – A-1 Supply.
•    A-1 Supply grew rapidly and in 1979 became known as Sircoma (Si Redd’s Coin Machines).  It made video poker, blackjack, keno, and pokie machines, which it sold to casinos in Nevada and New Jersey.  In only 7 years, annual sales rose from under $3 million in 1975 to over $61 million in 1982. Not only did sales of IGT’s machines rocket in this period (they held around 90% of the Nevada video pokie machine market), but the video pokie machine market rapidly increased to, to take up around 9% of gambling machines.

•    In 1980 SIRCOMA became International Game Technology (IGT)
•    In 1981 IGT went public on NASDAQ.
•    In 1986 Redd sold his controlling share in IGT
•    Redd resigned from the Board of Directors of IGT in 1991
•    Redd passed away at his home in California 2003 from an extended illness

The story of these two pokie machine giants intertwines when, in 1996, Fulton’s Anchor Gaming – the “brains”, got together with Redd’s IGT – the “money”, to bring out the Wheel of Fortune pokie machine.  The game, based on the popular television show, brought the bonus game to the market for the first time and simultaneously offered massive progressive jackpots.  The bonus game allowed players to get to another level on the game and make more money based on the spinning of the famous wheel of fortune.  The partnership between the two companies continued with the production of I Dream of Jeannie and the birth of the Television Franchise for pokie machines.

Progressive jackpots are now the norm in the pokies market.  However, the concept of multi-site progressive pokie machine jackpot was only developed in 1987.  IGT were the first pokie machine manufacturers to develop a multi-site progressive pokie machine game with their Megabucks™ system.

Progressive pokies come in 3 forms, Individual, Linked and Multi-site Progressives.  The names are pretty self-explanatory.  Part of the credit that is gambled is collated from the machine to go towards a huge jackpot.  The machine either operates on its own (Individual), with a number of other machines at the same location (Linked) or across many machines held in different locations (Multi-site).  With multi-site progressives, players in Nevada, for example, can play with different credit amounts to those in New Jersey and both are eligible for the phenomenal jackpot.

Progressive pokies first kicked off online with Cash Splash, powered by Microgaming, in October 1998 and within a year Microgaming were paying out jackpots over US$1,000,000 on a monthly basis.  Even now, it is still popular because of its simple game play and high payouts.

Of course the thing to remember with progressive pokies, is the trade-off between the payout rates and the mega-jackpots.  Because a certain portion of your bet is siphoned off to contribute to the collective jackpot, the payout rate of a progressive is lower than a non-progressive pokie machine… it’s all a question of whether you think that reduction in payout is worth the salt for the massive jackpot you might win?!