How Pokies Work

In the earliest days of pokies, long before the invention of the world wide web, slot machines were nothing more than mechanical designs. Thanks to today’s modern technology, they are much more advanced. Instead of using drums that rotate on a genuinely random basis to deliver haphazard payouts, today’s pokies are systematically configured with a computerized, random number generator that ensures arbitrary results, but with a specific percentage of payouts that guarantee the casino’s house edge.

The First Pokies in History

The very first true slot machine was invented by Charles Fey in the late 1800’s. It became an instant hit in local saloons around San Francisco, California, featuring the first automatic payout system and actual reels. His initial design was deemed the Liberty Bell, constructed with three reels and five symbols; the Liberty Bell, diamonds, hearts, horseshoes and spades. A nickel was inserted to play, and upon pulling the lever, the reels would spin casually until each one stopped on a random symbol. If three liberty bells were revealed, the highest payout of 10 nickels was awarded.

This style of machine was copied by other manufacturers and spread throughout the United Sates fairly quickly. The popular “cherry” symbol still found in today’s fruit machines came from the Bell-Fruit Game Company, which used slot machines with fruit symbols to award various flavors of gum as prizes, instead of money. This gear-infused trend continued for over 60 years, and resulted in just about every jurisdiction incorporating specific laws that referred to the legality of a “gambling device”.

Electromechanical Pokies of the 1960’s-70’s

Although a few preliminary video poker machines were developed with this technology as early as the 1940’s, it wasn’t until 1963 that Bally introduced the first electromechanical slot machine, titled ‘Money Honey’. It was a landmark invention as it featured a ‘bottomless hopper’ and the largest automatic payout ever imagined, 500 coins. No attendant was required to deliver the payout and these pokies didn’t have to be serviced on a regular basis.

Moving closer towards the physical and online pokies we know today, the first video slot was introduced in 1976 by the Fortune Coin Co. when manufacturers replaced the physical reels with a computer based program that displayed the reels on a 19” Sony Trinitron color receiver (i.e. computer monitor).

Casinos look for More Money in the 1980’s

There was a big problem with pokies, and it had existed for as long as they did. Casinos and businesses that hosted these machines weren’t able to control their profits. They needed to stop players from getting lucky too often. For example, a 3-reel pokie with 12 different symbols would have a 1 in 1,728 chance of hitting the best paying combination. That was considered entirely too low by establishment owners. Adding another reel would deter players, while adding more symbols would require greater jackpot payouts, so those options were out.

First, manufacturers tried weighting the reels in electronic slots. It was easy enough to do without the player knowing. While spinning, only the correct line of symbols would be displayed on a reel, but in reality, the same symbol could be on multiple slots of a single reel, effectively reducing the chance of a player winning the jackpot by leaps and bounds. That concept was used for a few years, up until a Norwegian mathematician by the name of Inge Telnaes came up with a better, less deceptive way to guarantee casinos a profit in 1984.

Telnaes created what we know today as the Random Number Generator (RNG). He designed a computer chip that would use an RNG to determine where the reels stop with each spin. Because it was still random, it was impossible to predict what combination would result with each passing spin, but it was ingeniously fabricated so that the manufacturer can tell the machine exactly how much to pay out, based on what it takes in. Thus the predetermined payout percentage was born.

To put it simply, if a pokie is programmed to pay 95%, it will pay out $95 for every $100 it takes in over a specific amount of time. However, that’s a ‘long term’ percentage. It could be set to take 25 years to catch up to that perfect payout margin, but it will. A brand new machine could just as easily pay the top jackpot prize on its very first spin as its 100,000,000^th. But in time, it will make up for the overage or shortage in the allotted time frame in which it’s programmed to do so.

The Arrival of Online Pokies

The latest addition in the history of pokies is the online slot machine. These first showed up in 1994 when Microgaming developed the very first online casino software platform. Interestingly enough, while they may seem completely different, online pokies are exact mirrors of the slot machines found in land-based casinos. They are nothing more than a software application being displayed on a computer monitor, incorporating an RNG to randomize the reels under an explicit predetermined payout percentage.

There are only two notable differences between physical slot machines and online pokies. The first is the most obvious; that we use a mouse to click buttons on a screen instead of pressing them on a machine. The second is less evident to the naked eye, but much more remarkable. Online pokies have much higher preset payout percentages than their land-based counterparts.

The reason is simple. Online gambling sites have way less overhead and can afford to pay out higher amounts while still turning a profit. They also have more competition from the entire iGaming industry, whereas brick-and-mortar casinos and pubs are frequented by locals due to sheer convenience of proximity. The result is clear, though. Players get way better value playing online pokies with payout percentages generally set to at 95-97.5%. In comparison, by law, Las Vegas only has to set their payouts to 75% or above.