Slot machines include a currency detector that validates the coin or money inserted to play. The machine pays off based on patterns of symbols visible on the front of the machine when it stops. Modern computer technology has resulted in many variations on the slot machine concept. Slot machines are the most popular gambling method in casinos and constitute about 70 percent of the average casino's income. It is estimated that thirty percent or more of the profits from gambling machines come from problem gamblers.

History

Sittman and Pitt of Brooklyn, New York, U.S. developed a gambling machine which was a precursor to the modern slot machine. It contained five drums holding a total of 50 card faces and was based on poker. This machine proved extremely popular and soon many bars in the city had one or more of the machines bar-side. Players would insert a nickel and pull a lever, which would spin the drums and the cards they held, the player hoping for a good poker hand. There was no direct payout mechanism, so a pair of kings might get the player a free beer, whereas a royal flush could pay out cigars or drinks, the prizes wholly dependent on what was on offer at the local establishment. To make the odds better for the house, two cards were typically removed from the deck: the ten of spades and the jack of hearts, which cut the odds of winning a royal flush by half. The drums could also be re-arranged to further reduce a player's chance of winning.

The first one-armed bandit was invented in 1887 by Charles Fey of San Francisco, California, U.S., who devised a much simpler automatic mechanism. Due to the vast number of possible wins with the original poker card based game, it proved practically impossible to come up with a way to make a machine capable of making an automatic pay-out for all possible winning combinations. Charles Fey devised a machine with three spinning reels containing a total of five symbols – horseshoes, diamonds, spades, hearts and a Liberty Bell, which also gave the machine its name. By replacing ten cards with five symbols and using three reels instead of five drums, the complexity of reading a win was considerably reduced, allowing Fey to devise an effective automatic payout mechanism. Three bells in a row produced the biggest payoff, ten nickels. Liberty Bell was a huge success and spawned a thriving mechanical gaming device industry. Even when the use of these gambling devices was banned in his home state after a few years, Fey still couldn't keep up with demand for the game elsewhere.

Another early machine gave out winnings in the form of fruit flavoured chewing gums with pictures of the flavours as symbols on the reels. The popular cherry and melon symbols derive from this machine. The BAR symbol now common in slot machines was derived from an early logo of the Bell-Fruit Gum Company. The payment of food prizes was a commonly used technique to avoid anti-gambling laws in a number of states, and for this reason a number of gumball and other vending machines were regarded with mistrust by the courts. The two Iowa cases of State v. Ellis and State v. Striggles are both used in classes on criminal law to illustrate the concept of reliance upon authority as it relates to the axiomatic ignorantia juris non excusat. In these cases, a mint vending machine was declared to be a gambling device due to the fact that by (internally manufactured) chance the machine would occasionally give the next user a number of tokens exchangeable for more candy. Despite the fact that the result of the next use would be displayed on the machine, both courts ruled that "The inducement for each play was the chance that by that play the machine would be set to indicate that it would pay checks 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 1 vice."