Las Vegas and Atlantic City may be the gambling capitals of the United States, but the symbol of those sin cities, the slot machine, was born in San Francisco. The first nickel slot was created in 1893 by an inventor named Gustav Schultze, whose Horseshoes game paid two nickels if the wheel landed on one of ten horseshoes—customers got a free drink if they landed on a joker, and the remaining 14 out of 25 symbols were worth nothing.

Charles Fey, a friend of Schultze’s, made his own version of Horseshoes in 1894. Fey’s breakthrough game, known as the 4-11-44, followed in 1895. Built in his basement, and using wood that happened to be lying around for the cabinetry, the first 4-11-44 was installed in a local saloon. Thanks to the enthusiastic response, Fey built several more, and by 1896 he was devoting himself full time to the manufacture of slot machines.

The modern era of slot machines arrived in 1898, when Fey created the Card Bell, the first machine able to pay winnings to customers automatically. That machine evolved in 1899 into the Liberty Bell, of which only about 100 were made. The machine had a cast-iron arm, a metal case, and a horizontal window revealing the symbols on the machine’s internal reels. Three bells were worth 20 coins; two horseshoes and a star earned you four.

Before he knew it, Fey was competing with moneyed Eastern manufacturers such as Illinois, Clawson, Caille, Watling, and Mills, who gave their machines names like Golden Gate and California Bear to make them more appealing to San Franciscans. Local competitors included Reliance Novelty, Royal Novelty, and, of course, Schultze.

Almost from the beginning, though, cash payouts were banned. For a while, manufacturers engineered machines to pay customers in trade checks, which could then be redeemed, but that practice was also outlawed in 1902. Curiously, around the same time, a specialized type of slot machine known as a "trade stimulator" escaped regulation. These machines paid out in cigars: Not coincidentally, a San Francisco police commissioner named Moses Gunst owned a chain of cigar stores and had a silent interest in Reliance, which made many of these so-called cigar machines.

The San Francisco earthquake of 1906 destroyed most local slot-machine manufacturers, and California banned the use of slot machines altogether in 1911. To stay in business, manufacturers revamped their slots as gum vending machines. For example, the Mills O.K. Gum Vender (the "O.K." was meant to signal its compliance with the law) dispensed gum with each nickel played, and also paid "Profit Sharing Dividends" of tokens. Rock-Ola, which became known for its jukeboxes, also made an O.K. machine, as did Watling and others.

During the 1910s, Mills, Caille, and Watling were the big players. The enactment of Prohibition in 1919 actually aided these manufacturers because it created the speakeasy, which...

The 1930s were also important for slot machine collectors because that was the decade when Bally was formed. When it was founded in 1931, Bally began by making amusement games such as pinball and horserace machines. In a foreshadowing of things to come, in 1938, Bally devised the Double Bell, which allowed a customer to play a nickel slot on one side and a quarter on the other.

During World War II, slot-machine manufacturers shifted their attention to the war effort. After the war, they shifted focus again to the emerging market in Nevada. Gambling had been legalized there on a county-by-county basis in 1931, but things took off after changes in tax and license laws were passed in 1945. Virginia Street in Reno and Fremont Street in Las Vegas quickly became gambling centers, and manufacturers rushed to create machines for this hungry new market.

Jennings had the first post-war slot in 1945, the Bronze Chief, and its Super Deluxe Club Chief from 1946 was the first illuminated slot. Mills High Top nickel slots were fixtures in many a casino, as was the Mills Black Gold. Another typical sight in a late-1940s and early-1950s casino was a carved wooden figure of a Western character, such as a miner holding a pan of gold. Made by sculptor Frank Polk, these characters had chests designed for a Pace or Mills slot machine. Only 92 of these unique pieces were made, making them one of the most collectible slot machines around.

Jennings was still a force in the 1950s (its Buckaroo glowed in the dark), but by the 1960s, upstart Bally began to take over the business, thanks in no small part to its Money Honey in 1963 (it could pay out hundreds of coins rather than just 20 or so) and the model 809 from 1967, which allowed customers to play up to five coins at once. Jennings countered in 1967 with slots such as the Indiana, and Mills introduced a solid-state machine called the Mark VII in 1970, but neither had Bally’s multi-function features. Bally had arrived at the table late, and won the pot.

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