There's a room at the Waukegan, Illinois headquarters of WMS Gaming that's crammed with slot machines, no two quite alike, with names like Leprechaun's Gold, Crocodile Cash and Filthy Rich. As you push buttons and watch virtual reels spin on video displays, you at first feel your adrenalin rush. But then you realize that these machines are running in demo mode. You never lay out any cash. You never hear the winning sound of coins clanking onto a metal tray. The only payouts are credits tallied on the screen-giving you a sense of what you would have won or lost had you been in a casino. Without the cash incentive, though, you can begin to see these slot machines for what they are: video games that accept a wager.

WMS began life in 1974 as a maker of pinball machines, entering the slot business in the 1990s. It has not always been a smooth ride. A few years ago, the company reported that the software underlying its machines could be hacked, and that the operating system-then proprietary-could potentially miscount player credits. New management was brought in and the company re-built the entire platform. The company's new CPU-NXT operating system is based on Linux. Its processor of choice is a Pentium 3, with the option to upgrade. Proprietary is out; off-the-shelf has become the default choice.

The company's slots are designed and tested in-house, at WMS's technology center, the original company headquarters located near the brick and ivy of Chicago Cubs' Wrigley Field. There, amid the cubicles, Silicon Valley-style fitness center, and the obligatory game room are many engineering refugees from local telecommunications companies. It's a good bet that none of them imagined designing slot machines for a living. But then, few people consider an obvious fact about slots: behind their flash and noise, they have the heart of a computer. Their screens simulate the whirl of reels. Their CPU calculates the payoff at specified odds. Their screens have a setup mode where the casino can set the odds. They use a highly tweaked but off-the-shelf operating system. They are connected on a local area network.

Laurie Lasseter, WMS's vice president of engineering and technology, always knew she wanted to design computers for a living. Back in the late 1970s, she earned advanced degrees in hardware and software design at Cornell. Lasseter started her career at AT&T Bell Labs designing memory access systems for fault-tolerant computers. Eleven years later, she moved to Motorola, eventually heading development of the company's cellular base stations using CDMA technology. She remembers that job as both rewarding and frustrating-she got to do great engineering work, but with a glut of products on the market, the pace of technology adoption was slow.

"Other than it being a different industry, the engineering work in gaming is very similar," she says. "A slot machine has a CPU and peripherals: the coin mechanisms, the bill validator or, if the slot machine doesn't take cash, the ticket printers. It has to interface to the player through buttons and a touch screen. And all these computers are networked together with a slot tracking system that monitors revenue for the casino. The network is vital because those revenues are the casino's livelihood."

Lasseter says that slot machines are following the "workstation trajectory," giving up their proprietary architecture to take advantage of the economies of scale enjoyed by Intel and other PC component vendors. Faster processors, standard memory cards, better graphics accelerators-all leading to better, more realistic animation. Computer games have become the killer application for high-end processing power, and that's just fine with WMS.

But unlike workstations, slot machines operate in a thicket of regulations-in the U.S. each state has its own, as do Indian reservations and other countries. New slot machines are submitted to regulatory laboratories for compliance testing and certification. And, unlike workstations, slots are under constant threat by tech-savvy thieves. All of this puts stringent demands on the equipment designers. "For example," says Lasseter, "we have to make sure that somebody can't replace our compact flash cards with their own, substituting software that would perhaps pay them a lot of money." The company's defense is to encrypt each of the thousands of files running on the OS. Plug in a different chip, and the software will not run.

The virtual reels are displayed on a flat LCD, comparable to those used in a video games. As for the operating system, if you go down enough layers, you run into something familiar: embedded Linux. "We've got a lot of unique functions that we've built atop of Linux, including software and memory authentication," Lasseter says. "But we talk to our peripherals using Linux drivers." Slot machine makers have largely gravitated to Linux and Windows CE. WMS chose the former because it is more compact, and because the source code is available. "A lot of regulators require that we be able to deliver all the source code that it takes to build our product and that we give them the tools to recreate the object from the source."

WMS worked with an industrial design firm to build its new ergonomic cabinet, called "Bluebird." The placement of the buttons, angle of the screen, and height of the button panel are all intended to let people play comfortably for longer. "The other big advantage is serviceability," says Lasseter. "When you open the cabinet up, it's very uncluttered, making it easy to replace and service elements." What Lasseter calls the "platform"-the CPU board housing the operating system, was a separate development effort, as was the software associated with each game-the slot machine equivalent of an application. Yet another engineering group works on top boxes, large, theme-related enclosures that go on top of some games-stirring unpredictably into action as a bonus round-and thereby acting as a sort of mechanical beacon for players.

An East Coast Invention Finds its Home in the West

Some of the earliest gambling machines to achieve popularity came from New York and New Jersey: poker machines, containing five sets of tiny playing cards, mounted on five drums. The drums would spin, flipping the cards, to create a poker hand. The payoff was free drinks at the bar-one drink for a pair, 100 for an highly unlikely royal flush.

But the real market arose on the other side of the country, in and around San Francisco, spawned by the California Gold Rush, which attracted fortune seekers from all over the world (and gave birth to another American icon: blue jeans). By 1890, San Francisco had more than 3,000 saloons and cigar stores selling liquor: one liquor license for every 96 residents. And where there was whiskey, scotch and tobacco, there were gambling machines-an estimate 1,500 of them in 1893 and growing rapidly.

For the next 100 years or so, a parade of companies-mostly long gone- produced mechanical slot machines of startling variety. There were machines that rolled dice, flipped cards, and rotated disks. But the most prevalent gambling machine was the three-wheel slot machine. The first, invented by Charley Fey in 1899, was called the Liberty Bell after its high-scoring symbol. That model and its offspring would sell for the next half century. The machines were a variation on some poker machines, which put card symbols on rotating reels. With the Liberty Bell, instead of trying for card combinations, you aimed to line up hearts, diamonds, spades, clubs, horseshoes, bells and stars. Later machines used fruit: cherries, oranges, plums and lemons-the flavors of gum that were dispensed on some hybrid models. Vestiges of these edible symbols are still around today, though the liberty bell has been replaced with a black bar.

Electronics entered slot machine design in the early 1980s. The earliest still had mechanical reels, but were driven by circuit boards. A rear-projection model debuted in 1966. A slot machine employing a video screen was developed in 1975. Neither at first caught on, although a video draw poker game from slot maker IGT did. By 1982, 10 percent of slot machines were video. Today, casino floors could be lit from the glow of video screens, alone.

Like all video games, video slots are an illusion. The player is asked to believe that animated reels and passing symbols are physical entities. Most slot machines still have the gearshift-like handle-the source of the nickname "one-armed bandit"- on the side, reminiscent of the days when muscle power actually cranked the spring-loaded reels. But in fact, the outcome of video games is pre-determined by a random number generator: the animation of a spinning reel is just for show.

Mechanical slots are still around; some players still don't trust the video variety. But their days are numbered. Long-term, the traditional jackpot sound of falling coins may also disappear. More and more slots substitute a reader that swallows a bar-coded card and spits out another, printed with your current holdings. Many players don't like them: imagine a pachinko parlor without the sound of steel balls. But casino managers love the reduced maintenance.

Studio approach to game development

As a group, slot machine players are older than video gamers, but as video gamers grow up, they are giving slot designers the liberty to design more creative products. So it might not be surprising that the guy heading game development for WMS came from the video game industry. Larry Pacey, who headed game development at Sega and Atari, says the two businesses are close cousins. "Our target demographic is different, but video games target lots of different demographics, even within that business. We leverage the exact same kinds of talents we have in video games-art production, entertainment, creative design, and engineering-to create new types of game play experiences."

When he first arrived at WMS, Pacey noticed that "there were no real stakeholders for a given project, no people involved on a daily basis in making a single game. The game artists and designers would flush out the concept, then engineering would go off and program it. But it wasn't a congealed team."

Pacey responded by restructuring game development at the company to more closely resemble that of the video game industry, dividing the staff into small, semi-entrepreneurial groups. This studio approach-also employed in automobile design-brings a variety of talents together to produce a single slot. Each game in development has a producer, as well as a designer, who also serves as the gaming historian, knowing what has worked and not worked in the past. The team also includes artists and, of course, software engineers. WMS now has five studios in Chicago, two others in Las Vegas and Sydney, Australia-with a couple of other international studios in the planning stages.

There's one other member of each design team, and he has no counterpart in the video game business: a mathematician. WMS employs a staff of them, half of whom hold PhDs. Their tool of choice is the slot machine equivalent of a render farm-a piece of software that can exercise a machine under development to see its underlying style of play. "My mathematicians have math farms that are running almost virtual casinos," says Pacey. "We can plug in a product and know in essence what a player's experience will be like. They do simulations throughout the whole process. They test mathematical assumptions behind a game in development, even when they don't yet have a product attached."

The mathematicians do more than figure out if the machine is paying out at the specified odds. They create games that play differently for different types of players. For years, says Pacey, slot machines were designed as if players were all alike: producing one type of slot for everyone. My math guys had a message: players have different styles of play-they are motivated by different things."

In WMS's universe of players and accompanying slots, there are two polar opposites and several gradations in between. One group, whom Pacey calls "gamblers," play for the sole purpose of winning big. They are not there to be entertained. They prefer symbols to cute characters. They count their money and hope to see it increase. Gamblers, says Pacey, are there to gamble.

At the other extreme are what Pacey calls "time-on device" players-people who don't really expect to win, but do expect to be entertained. "For them, the rolling slots are their own reward, and the purpose of winning is to stay on the device longer. They are perfectly fine if they got a payout and a cute animation. That's their reward. They just want to have an experience on this device, and the more varied and interesting the experience, the better."

For these player types and others, the company has figured out what percent of the market each represents and has built its slots accordingly. Some of this varies by country: Australia, as it turns out, is a nation of gamblers. In the U.S., players tend to skew toward entertainment. The different slots may vary some in how they look, with gambler machines having a comparatively no-nonsense look and simple bonus rounds. But underlying all slot machines is a mathematical model of how those games will play, the pattern of wins and losses, the experience you have if you play it long enough.

Birth of a slot machine

As players get more computer-savvy, slot makers have been willing to break the fiction of the spinning reels with an interactive, video game-like bonus round-the kind beloved by "time-on-device" players. WMS claimed to have invented this style of play, which it calls the "second-screen bonusing." The first one I encountered in WMS's demo room caught me by surprise. Suddenly, the screen is displaying an array of his-and-hers cartoon characters, prompting me to match two of them and arrange a date. But my sexy lady and geek guy never warmed to each other-he only got a kiss on the cheek and I lost a chunk of virtual money, as a result. The tall top boxes on some machines are a variation on this idea, with the bonus round played out by mechanical figures.

Who came up with the idea of a slot machine that turns into a dating game? "We're heavily driven by market research," says Pacey. "But a great idea can come from anybody, and that's something we nurture here. We've had testers, game designers, artists, mathematicians-all originating ideas." Even the math guys? "A mathematician might be modeling something that proves to be really cool, and that model proscribes a certain style of game. That idea is then flushed out by the studio. So-yes--the math guy was actually the source of the game design. That's what's great about the studio structure."

Ideas are reviewed by the senior staff, and those that pass are tested with actual players using a simple prototype or PowerPoint presentation. The surviving concepts get developed into a playable state and taken again into the field. "We give players an imaginary $20 and let them go at it," says Pacey. "That research gives us guidance on what works and what didn't work. We make those modifications, and then submit the finished prototype to the regulators and testing lab for final approval. After a final round of testing, the game goes on sale." Typical development time for a single product: 12 to 18 months.

From there, the newly hatched slot takes its place in the casino, ready to earn its keep. Maybe a player has settled in at one, dipping her hand into a paper cup filled with coins, feeding the beast, pushing the buttons, watching the virtual reels spin and dipping into the paper cup once more. The player has a distant look. Maybe it's an altered state of consciousness, the kind of meditative trance familiar to fishermen, Zen Buddhists and PlayStation 2 gamers. Whatever the player is feeling, to the casino, this scene looks like money in the bank. And to the slot designers, it's the look of success.

Sidebar: A Push for New Standards

In some ways, slot machine development seems state-of-the-art. But in other ways, they are trailing-edge technology-at times, even antiquated. "The gaming industry is definitely going to stay away from the bleeding edge, mostly because the industry is very highly regulated," says Laurie Lasseter, WMS's vice president of engineering. "With any technical innovation, the regulators are going want proof that the new technology can be completely secure before they are going to allow it onto a casino floor. Some of the innovations, like wireless and electronic funds transfer, are good examples of technologies widely available in the world, but still not seen a lot in our industry because of regulatory hurdles."

Peter DeRaedt, president of the non-profit Gaming Standards Association (GSA) says that the gaming industry can be "surprisingly antiquated: a $12 billion industry still struggling with 1980s technologies."

One such technology is the communications protocol, first developed to collect basic accounting and security information from the slot machines, then expanded to collect information on individual player activity (in order to track player ratings) and on progressive slots-slot machines that are linked to pay one large common jackpot. Back in the 1980s, slot maker IGT developed one such protocol, called SAS, which is now used by some 70 percent of U.S. casinos, making it something of a de facto standard. SAS is technically a language, "spoken" by the slot machine to its network interface card. The card, in turn, uses a proprietary network protocol to send the information to the back-office accounting system.

In 2001, GSA assumed control of change management for the SAS specification. The organization is now developing a toolkit that simplifies compliance testing for SAS implementations by simulating both the game and the host system that link slots together. In addition, GSA is also developing a new, open standard protocol called BOB ("Best of Breed"), which will employ Ethernet, TCP/IP and XML and other standards. "XML is particularly important," says DeRaedt, because it allows vendors to extend proprietary features.

Another area in need of standardization is in the interface between the slot and its peripherals. "Believe it or not, bill validators, coin accepters, and printers all use different protocols and connectors," says DeRaedt: "By contrast, look at USB ports in the PC industry, which have dramatically revolutionized peripheral support. In the gaming industry, if a manufacturer makes a new peripheral, you can't be certain it will talk to the machine. Needless to say, development cycles are very steep." GSA's approach is simple: given the success of USB on PCs, it should be mandated as well on slot machines.