Understanding How Slot Machines Work

Understanding How Slot Machines Work
By Jon Young

How do slot machines work? Most casino players know how to insert coins or a credit card and hit the Spin button. But what goes inside a modern slot machine in 2020?

On this TopNjCasinos.com page, we’ll explore how slots games work and examine the ways you can find the best games and payouts.

You can also find hundreds of legal online slots to play at top New Jersey casinos. Follow our reviews guides and sign up to a licensed NJ casino today!

The History of Slot Machines

Slot machines have come a long way since the late 19th century. Early games didn’t pay out real money, and they only featured 3 reels. In 2020, slots players can choose from thousands of slots games with multiple reels, bonus features, and jackpots.

1880s: New York inventors Sittman & Pitt develop the world’s first poker card machine, which pays out drink tokens for winning poker hands.

1890s: Engineer Charles Fey pioneers his Liberty Bell machine. The game features three reels and a Liberty Bell symbol which is still featured in many modern slots.

1907: Herbert Mills adapts Fey’s earlier model and launches the Operator Bell game. The Operator Bell introduced the BAR symbols, and fruit symbols like melons and cherries. Instead of cash prizes, players win chewing gum.

1964: Bally introduces the Money Honey game, the world’s first slot machine using electromechanics. Money Honey is the first game to feature a “hopper,” which is able to hold more coins and pay bigger prizes.

1965: “Big Bertha” is launched in Las Vegas, a giant slot machine with 8 reels and 160 reel symbols.

1970s: Mechanical slots dominate casinos during the late 1960s and early 1970s. In the late ‘70s, Fortune Coin release the world’s first video slot programmed with microchips instead of electromechanics. IGT (International Game Technology) acquires Fortune Coin in 1978.

1980s: IGT continue their dominance of the US slot machine market by launching Megabucks. It’s the earliest progressive slot, able to pay out multi-million dollar jackpots.

1990s: IGT introduces the Wheel of Fortune slot, which combines physical prize wheels and video slot technology. WMS develops the first video slot with a bonus feature – Reel ‘em In. The first online slot machines also appear, pioneered by Microgaming. US giant, Bally, also introduce their own online slots games featuring scatters and wilds.

2000s: Online slots technology continues to evolve. Developers introduce bonus features like free spins, trail bonuses and skill games. Branded slots are produced, based on popular TV shows and films. These feature actual video footage and source material. Licensing jurisdictions emerge around the world in countries such as Malta and the UK. Video slot games are legal in many US states, but online slots gambling is still prohibited.

2010s: The first mobile slots appear for Apple and Android devices. Games can be played on small touch screens as long as users have a Wi-Fi or 3G internet connection.

2013: Online slots are legalized and regulated in New Jersey. Major developers like NetEnt, Scientific Games, and High 5 Games acquire gaming licenses to supply online slots in the state.

2017: An anonymous player wins the largest recorded mobile slot jackpot. They win more than $9 million on mobile slot Mega Moolah.

2018: The world record for an online jackpot is broken. An anonymous gambler wins over $21 million playing Microgaming’s Mega Moolah slot.

Slot Machine Parts & Mechanisms to Know

A modern slot machine may feature dozens of mechanical and electronic parts. Here’s what you may find in a typical land-based slot machine.

Machine Cabinet: The cabinet houses the video screen display and any mechanical parts like reels and the spin trigger.

Video Display: Video slots use a video screen to display the reels and/or paytable. Modern slots use LED backlights and HD monitors for a better experience.

Microprocessor: Modern video slots use microprocessors to handle the game. The microprocessor triggers a random number generator (RNG), which calculates an algorithm to decide when the reels stop.

Coin/Notes Slot: Some casino slots still accept coins or bank notes as a method of payment. Payment is taken by the machine, with available credits displayed on the video screen.

Ticket In/Ticket Out (TITO): Most casino slots use a ticket system. When you cash out winnings, you receive a ticket displaying your total credit. You can then insert the ticket into a new machine and use your funds to keep gambling.

Lever/Spin Button: A physical button is used to start the game. Some nostalgic slot machines use a lever. This triggers the machine’s microprocessor and starts the game.

Bet/Payline Buttons: Older slot machines use physical buttons that let you select the number of paylines you want to bet. There will also be a button to alter the number of coins and bet size.

Reels: Slot reels are either physical or displayed on the video screen. Reels are controlled by a random number generator that determines when they stop. When the reels come to a stop, prizes are calculated based on the number of matching symbols across horizontal paylines.

Paytable: A paytable will often be displayed permanently at the top of the video slot. This lists all available payouts, as well as bonus trigger details. Progressive slot machines will display the current jackpot as it changes in real time.

Slot Machine Variations for Beginners

We hope we’ve solved the mystery of how slot machines work. Let’s examine the types of slots you can play in your nearest casino or online. You can read more information in our easy beginners guide to slot variations too.

Low Limit/High Limit: Video slots usually cater for two types of slot players: high limit and low limit. Some land-based slots even reward bigger returns if you play higher-stake machines. Low-limit games, or “penny slots,” have minimum bets of $0.01. High-limit games often have bigger minimum stakes worth $10-25.

3-Reel: 3-reel slots, sometimes called “steppers,” recall the classic slot machines with levers instead of buttons. There will only be one or two paylines and often no bonus feature.

5-Reel: Most video slots in 2020 are 5-reel games. Slots are played across 3 or 4 rows to allow for more multiple paylines. 5-reel slot machines also feature bonus symbols like wilds and scatters. You can find our guide to the top 5 slot themes here.

Progressive Jackpots: Progressive slot machines feature a special jackpot that is linked between all eligible machines. Players contribute a small part of their wager toward the jackpot. The jackpot is then triggered either at random or by playing a special bonus game.

Branded Slots: Most land-based and online casinos feature at least one branded slot. Brands can be as diverse as a hit TV show, Hollywood movie or musicak group. You may be treated to actual video footage and sound while you play.

What Are Random Number Generators?

How does a slot casino machine work? Modern video slots and online slots are programmed using Random Number Generators (RNGs). RNGs are programs that create algorithms to determine where the reels come to a stop.

On a typical spin, the RNG will generate a number from billions available. The number corresponds to a symbol on the first reel, known as a “virtual stop.” The process is repeated for the 2nd, 3rd, 4th and 5th reel. However, the algorithms can relate to multiple symbols at once, so it’s impossible for a player to work out where the reels will stop.

Some slot machines come with a “Skill Stop” button that lets you stop the reels early. In reality, however, the outcome is decided as soon as you hit the Spin button. The RNG has already calculated its algorithm and determined where the reels will stop.

Here’s how it works:

  • 1: Player pulls the lever or pushes the “Spin” button
  • 2: The RNG chooses a number combination from billions available
  • 3: The numbers correspond to specific symbols on the reels, “virtual stops”
  • 4: The reels stop and winning combinations are paid
  • 5: The process starts again

RNGs are routinely tested by approved laboratories. In New Jersey, the Technical Services Bureau (TSB) is responsible for ensuring the integrity of casino slot machines. The Information Technology Investigations Unit (ITIU) performs audits for both land-based and online casino games.

How Slot Machines Are Programmed

Before you get to play a slot, it will have been designed by a game manufacturer with a very clear idea of how it pays.

PAR sheet: Game designers use PAR (Probability and Accounting Report) sheets to determine the symbol arrangement on every reel. The sheet helps the designer calculate the odds and payouts for every feature in the game:

  • Regular reel symbols
  • Wild symbols
  • Scatter symbols
  • Bonus jackpots and features
  • Multipliers and random jackpots

In the US, Class II and Class III machines are the most common form of slots.

Class II: Class II games have a set number of fixed outcomes for the player. However, these are delivered at random for that element of chance.

Class III: Class III games are offered in casinos across the US. Each spin is completely random from one another, so the element of chance is a lot higher. Most slots use server-based gaming (SBG). That means, when you play a game, you are interacting with a game provider server maybe many miles away from the casino. SBGs may operate across the internet or across states.

SBG is perfect for handling linked jackpots like wide-area progressives, where perhaps thousands of players are gambling on the same game. As one player makes a bet in one casino, it will register with every other machine on the network. Server-based games are safer too, as a random number generator can’t be fixed on the casino floor or by an online casino worker.

  • Step 1: Player inserts money.
  • Step 2: Player hits the Spin button to start a game.
  • Step 3: The server’s RNG performs an algorithm to determine the outcome of the spin.
  • Step 4: The casino server adds cash to the player’s bankroll in the case of a winning spin.
  • Step 5: The process starts again.

Slot Payouts and the Odds of Winning

Now you know how slot machines work, you’ll need to understand how they pay out.

Every slot pays a different amount. Jackpots can vary from game to game, and some slots have bonus features or progressive jackpots which affect the overall payouts. Some slots pay little and often, while others pay out large jackpots infrequently.

Payout Percentage (RTP): Every slot has a theoretical RTP (Return to Player percentage) designed into the machine. Designers calculate the RTP depending on the number of symbols on each reel and their arrangement.

For example, let’s say you have a 3-reel video slot with 10 symbols on each reel. We know the payouts, and the numbers of ways you can win. To calculate the RTP, divide the Total Payout by the Total Win Ways.

  • 3-reel slot
  • Total Payout: 954
  • Total Ways: 1000

Return to Player Percentage = 954/1000 * 100 = 95.4%

The RTP is the average payout made to players. For example, a slot with an RTP of 96% will pay, on average, $96 for every $100 wagered. The remainder is the house cut. So, a slot with a 96% RTP has a house edge of 4%.

At an NJ casino, the payout percentage on slots could be anywhere from 85-97%. The higher payouts are reserved for higher-denomination machines where minimum bets are around $20-$30. Lower payout percentages can be found on machines with minimum bets of 1c.

For online slot machines, typical RTPs are much higher, perhaps as high as 95-99%. Most online casinos in New Jersey list their slot RTPs in the lobby.

Slot Volatility: By studying the payouts, you can judge whether a slot is volatile or not. Volatility, or variance, relates to the frequency with which a slot pays out.

  • High Volatility: Pays out large, but rare, jackpots. High-volatility slots may feature several bonus rounds or a progressive jackpot.
  • Medium Volatility: Pays out a mix of bonus jackpots and small wins. Medium-volatility slots may have good base game features like stacked reels or re-spins.
  • Low Volatility: Pays out lots of small and frequent wins. The hit rate is high but the maximum jackpots are low.

Without complete access to the slot PAR sheet, it’s difficult for players to work out whether a slot is volatile or not and access their chances of winning. Some online casinos in NJ will display the volatility of their slots, but not all do it.

There are two ways to gauge a slot’s volatility. First, test a slot with some demo credits. If you hit the bonus fewer than 15 times in 100 spins, it’s a volatile slot. Of course, you could still get lucky and trigger the bonus several times before hitting a losing streak.

Second, look at the paytable. Work out the difference between the top jackpot and lowest one. If the biggest jackpot is more than 8-10x the value of the lowest, it could be a sign of a volatile slot. Lower volatility slots will have flatter payout structures.

Slot Machine Features and Bonus Rounds

We hope we’ve answered the basic question of how do slot machines work? Now let’s explore the common features and bonuses of a typical slot in 2020.

Paylines: Paylines are the combinations of matching symbols that award prizes. Paylines run horizontally left to right (and sometimes right to left) across the reels. The more symbols you match, the more you win.

Symbols: Every reel might contain anywhere from 10-40 symbols in a prearranged pattern. High-paying slots will have their best symbols on the first three reels as they give players the best chances of winning.

Wilds: A wilds symbol is a joker that substitutes for all regular symbols. Wilds sometimes carry their own prize payouts. They may also award a multiplier that is applied to any winning combination the wild completes.

Scatters: A scatter symbol pays out when it appears anywhere in view on the reels. Scatters can also trigger bonus features when the required number appear in view at the same time.

Paytable: Every slot has a paytable listing the prizes, payouts and bonus details. Most online slot paytables also provide a list of paylines and the game’s RTP (Return to Player percentage).

Bonus Rounds: Modern slots feature at least one bonus feature. Usually, these are triggered by landing 3+ scatters on the reels. A bonus can be as simple as a gamble feature, where you have the chance to double your money, or as complex as free spins or a skill game.

  • Gamble Feature: Guess the color of the next card drawn (red or black). If you are correct, you double your current win. If you’re wrong, you lose your prize for that round.
  • Ladder Feature: Some older slots also feature a ladder-style gamble feature. Climb the ladder by stopping the flashing lights at the right time. The higher you go, the more you win.
  • Free Spins: You are awarded a number of free games, sometimes with a multiplier or wilds attached. Free spins can be retriggered if you land 3+ scatters during the feature.
  • Trail Bonus: This is a prize trail where your mission is to reach the end of the trail. Along the trail you can pick up cash prizes, multipliers, or free spins. Reach the end of the trail to win a jackpot.
  • Wild modifiers: In modern online slots, many wild symbols come with modifiers attached. Walking wilds move one reel at a time until they disappear from the reels altogether. Replicating wilds copy across more than one reel during a spin. Expanding wilds will stretch to fill an entire reel or reels.
  • Skill games: Newer video slots have started to introduce skill-based bonus games. These arcade-style games require some skill or dexterity rather than luck to win prizes.

Do Modern Slots at Casinos and Online Slots Work the Same?

Modern video slots are similar in many ways to online slots. You pay your bets, hit the Spin button and wait for the reels to stop.

Let’s compare land-based slots to online games. Are they really so different?

Random Number Generators: The RNGs governing modern online slots and land-based games will be the same. A microprocessor creates an algorithm that decides the outcome of every spin.

Some land-based slots use mechanical reels instead of video displays. However, these are also governed by electronic RNGs which determine where the reels are going to stop.

Payout Percentages (RTP): The RTP is the average slot payout made to the player. Land-based slots tend to have lower RTPs than online slots. For example, a land-based slot in New Jersey might have an RTP around 85-92%. For online slots, the RTP might be as high as 98% or 99%.

RTPs vary depending on factors like the casino’s overheads. Online casinos have lower overheads and costs and can therefore offer higher returns.

Bet Sizes: For online slots, the RTP is usually the same whether you bet small or big. For some land-based slots, the payouts can be bigger on high-limit slots.

Essentially, land-based casinos have a choice of microprocessors when they buy machines. Some allow bets from as little as 1 cent, while others require minimum bets of $10-25. The bigger jackpots will be reserved for players betting the higher limit.

In New Jersey, you can play most slots with practice credits. Test your skills without risking a dime. That’s a luxury you won’t get in a land-based casino.

Progressive Jackpots: You will find lots of online and land-based slots in US casinos offering linked jackpots. Progressives like these can be bigger if they are linked between hundreds of machines. Online progressives may be restricted to a dozen games across a few online casinos.

Player Points: Most slots let you earn player points as you gamble. You can then redeem points for perks and benefits. Online loyalty plans in New Jersey tend to be more generous than those found in land-based casinos.

Is There a Strategy to Playing Slots?

How do slot machines work? Modern games are governed by microprocessors and random number generators to calculate when you win. You win prizes according to a set paytable.

But is there a firm strategy for winning? Superstitious gamblers will claim that you have a better chance of winning when a jackpot has gone unclaimed. There is also a belief that slots have ‘hot’ and ‘cold’ streaks.

Unfortunately, those are just common slots myths. Slot machines don’t work in that way. Every spin is completely random and independent from the last. You have exactly the same chance of hitting a jackpot from one spin to the next.

There is a simple strategy for choosing winning slots, however. Always test a game with play credits first and read the paytable to study whether a slot may be volatile or not. The paytable will also list the RTP which gives you a clue about the long-term payout percentages.

Video slots and online slots are now 100% legal in New Jersey. Sign up online and play wherever you are!



Jon Young is a writer and magazine editor with over 12 years' experience in the gaming sector. He has written on everything from poker and slots to casino, sports betting and mobile gambling. When not trying to take down the Mega Moolah jackpot he can be found playing poker tournaments in casinos.

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