The Electronic Slot Machine Revolution

Slot machines weren't tremendously popular until some changes in the 1970's. Most casino players didn't take slot machines seriously or think that they were more than a non-serious gambling activity for women only. It was hard to take slot machine gambling seriously because the machines had mechanical limitations which interfered with their popularity.

Each reel on a mechanical slot machine had a maximum of 25 symbols on it, so the jackpots for these slot machines were pretty limited. The odds of hitting a jackpot on a machine with 25 symbols per reel were 1/25 X 1/25 X 1/25, or 1 in 15,625. Casinos always have to generate a profit, because they are businesses, so they can never pay out a jackpot at its true odds on a slot machine, so the jackpots were naturally limited by the size of these mechanical slot machines.

Most machines at this time were nickel machines, so the biggest jackpot that could be won were about $700 or so.
What Happened to Slot Machines in the 1970's
A pinball manufacturer named Bally invented a machine that was a hybrid electronic and mechanical machine. The betting and reel turning functions became, to a very small extent, computerized, although the jackpots were still limited by the size of the mechanical reels. Pulling the lever caused an electronic spinning of the reels though; it was no longer a strictly mechanical act. You could just as easily have been pushing a button to set the reels spinning.

The other major change they made was a really big one. They made bigger machines with larger hoppers. The hoppers are the receptacles in the slot machines that hold the coins, and bigger hoppers meant you could have bigger denomination bets and correspondingly bigger jackpots. Dollar machines became possible, and slot machines were starting to get taken more seriously.
The 1980's and Random Number Generators (RNG's)

Slot machines today are powered by a miniature computer. This minicomputer is called a random number generator, and it has removed the mechanical limitations involved in setting the odds for the slot machines. Since it's a computer, it can be programmed to have virtual reels that are much larger than an actual reel could be, and the odds and payback percentages for each machine can be customized to the casino's specs.

Numbers are assigned to each combination of virtual reels, and the minicomputer cycles through those numbers constantly. When you pull a lever on a slot machine now, or push the spin button, which is more popular than ever now, the computer stops generating numbers and presents the combination that corresponds to the number it generated when you hit the button or pulled the lever.

Realistically speaking, the reels don't even have to spin. That's just a show for entertainment value, because the spinning reels have no actual effect on your outcome.

The End Results - Bigger Jackpots and Serious Action
Now a slot machine can offer huge jackpots, because the computer can be set to have the odds of hitting that jackpot be anything the programmer wants it to be. And slot machines now can be seen at $5, $10, even $25 a pull. And of course, the higher the denomination of the machine, the better payback percentage it's programmed to have - the casinos want the high rollers to keep playing, so they program the big machines to pay out big percentages. (But the house definitely still have the advantage.)

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