This week, the price of the Bitcoin, a cryptocurrency, rocketed to a record high of nearly $70,000 for a single coin. This virtual “investment” returns no dividends and is sold for a price that fluctuates wildly. What’s the attraction? It’s simply the hope that you’ll get lucky and turn a profit.
The occasion brought to mind Charles Fey, one of the unsung inventors of early technology. A German immigrant, he became known as the “Thomas Edison of slot machines.”
A light bulb is a purely technical challenge, its purpose obvious. A slot machine is not only mechanically intricate but requires an understanding of the springs and levers of human psychology. How, after all, do you induce a person to hand over hard-earned cash on the thin hope of getting some of it back?
All sorts of mechanical devices, from typewriters to telephones, were coming into being in the late 1800s as science and the techniques of metalworking became more sophisticated. Charles Fey, born in Bavaria in 1862, went to work making farm machinery when he was fourteen. He moved to London and honed his skills working on nautical instruments. In 1883 he immigrated to America and settled in San Francisco.
The city had attracted a cadre of mechanically gifted Germans. One of them had devised a primitive gambling machine that spun wheels to determine payouts. Fey worked on device that made the entire operation automatic. By the end of the 1890s he had transformed the industry. Instead of flat wheels, Fey installed three reels in his machine, with symbols along the outside of each. After spinning, they stopped to display three images. Various combinations would disgorge a prize of from two to twenty coins, usually nickels. He called this early machine the “Liberty Bell.”
Then psychology came into the equation. Fey found that if the reels stopped in sequence, one at a time, the short moment of suspense added to the fun. He also widened the window on the reels, so that the player could see the symbols above and below the ones that counted. This introduced the “near miss” factor — the player who almost won was likely to continue playing.
All of this — the spinning of the reels, the sequential stops, the detection of the resulting combination, and the release of the payout down a chute — was accomplished mechanically, by gears and steel levers. The pull of a long handle activated the spring that provided the power.
With ten symbols per reel, there were a thousand different combinations, which meant that figuring the winning odds was almost impossible. For the player, that is. The operator knew for certain that the machine would pay out exactly 86 percent of the amount played. So for every $10 dropped into the slot, the machine pocketed for him a tidy profit of $1.40. The term “one-armed bandit” had a basis in fact.
Additional refinements led to the “jackpot,” a special cache of coins that accumulated behind a glass window. A particular combination of symbols unleashed the lucre, adding a thrilling bonus to the usual payout.
The machines were wildly popular. They soon showed up in bars, soda fountains, drug stores, and cigar shops. There was only one catch. In many jurisdictions across the country, public gambling was illegal. The devices were maligned as “Swindling Machines.”
Fey and others introduced variations designed to sidestep local laws. Some machines paid out tokens for use in the store and were known as “trade stimulators.” Some told fortunes. Some “sold” a pack of gum or candy with every play to cover their real purpose. The tradition of using fruit as the symbols on the reels — lemons, oranges, cherries and plums — evolved from these machines.
In spite of the legal obstacles, slot machines thrived during the Roaring Twenties. A reporter described one as “a cash register dressed up for a circus.” The size of the reels was expanded, offering more chances to win — and lose. In 1929, Fey devised the first machine that accepted silver dollars.
The all-cash business attracted mobsters. Rackets boss Frank Costello was said to control almost a third of the 25,000 slots in New York in the 1930s. Politicians took a stand — New York City mayor Fiorello LaGuardia loaded a barge with confiscated slot machines and dumped them into Long Island Sound while reporters snapped photos.
In 1951, federal legislation went after slot machines at their source. Manufacturers were no longer allowed to ship them to places where they were illegal. Players had to travel to the machines. That meant primarily to the nation’s gambling haven, Las Vegas, Nevada. Once ensconced there, the slots became more popular than table games like roulette and blackjack. Vegas casinos today rake in 60 percent of their revenue from some 45,000 slot machines.
Just as Edison’s incandescent bulb has been pushed aside by LED lighting, Fey’s mechanical wizardry has long since been replaced by computer chips. The heart of a slot machine today is an electronic random number generator that determines the payout as soon as a button is pushed. The spinning wheels, flashing lights, and lunatic noises are only for show.
We know from the mathematical laws of chance that, in the long run, the house wins. But we humans, who find ourselves on the losing side of mortality itself, continue to be tempted, entranced and bedazzled by pure luck. As for the slot machine, “it's the greatest instrument of optimism that was ever developed,” an operator once said, “full of promise, fascination, hope, and LIFE.”
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Another wonderful story, Jack
Do you play slot machines once in a while Jack? Interesting essay.