Of all casino games, the slot machine is the only all-American product. Today's bewildering variety of coin- and token-operated machines can trace their lineage back to the original slot machine invented in the early 1890's by a Bavarian immigrant named Charles Fey, a machinist. Fey's machine established the design that is in use today; a set of three wheels with a variety of different symbols on them, with payoffs based on particular combinations of symbols. The wheels on these early machines were bedecked with hearts, spades, diamonds, and clubs, along with various other symbols, including horseshoes, stars, and Liberty Bells. The big payout occurred when three Liberty Bells showed up in a row. The machines quickly became known as "Liberty Bell slots," or simply "Bells."

Fey, who lived in San Francisco, installed his machines in numerous bars around the Bay Area, where they quickly became a palpable hit. The machines sat on top of the bar, where customers could easily play them. At first, the payoffs were free drinks, though cash soon became the medium of exchange. The machines accepted nickels (equal to the cost of a decent lunch) and paid out up to ten nickels if the right combination lined up in the window. Fey and the bar owners split the profits from each machine. Soon other manufacturers entered the scene with their own machines. Although all used the same basic format, the wheels are bedecked with a variety of different symbols, fruits being common (so common that in many places slots are still called "fruit machines").

Around the turn of the century, Herbert Stephen Mills widened the payout window so that the player could see not just the symbols on the payoff line but also those just below and above them. Today, virtually all slots have this feature. Mills was a genuine innovator and a clever man who understood the psychology of gambling. He also introduced the visible coin bin. Each coin that went into the machine could be seen behind a glass window. The gambler who played one of his machines was not merely playing for a theoretical payout; the nickels to be won were actually in plain sight. Mills also increased the size of the wheels in each machine so that each had twenty symbols, making certain combinations particularly unlikely. With this new design, Mills introduced the concept of the big payoff-the jackpot. There is little doubt that, psychologically speaking, the jackpot is the single most important factor in the stunning popularity of the slot machine.