A Pictorial
`History of
`the First
`100 Years
`Fifth Edition I
`
`Marshall Fey
`
`IGT EX. 1009 - 1/34
`
`

`
`$29.95
`
`by Marshall Fey
`
`256 pp; 630 photographs, 504 in full color,
`mathematics; mechanisms; advertisements ;
`line drawings ; maps; index; bibliography.
`
`It is all here! The complete and colorful
`story of coin-operated chance machines from
`the time they first became prevalent in the early
`1890's up to the coin gaming found in todays
`casino's. Included in the exciting history of this
`major industry are the pioneers, inventors,
`manufacturers, and operators. There is also
`over 400 photographs, mostly in full color, of
`slot machines of every imaginable genre.
`The slot's destiny rose and fell with the
`changing moods of the nation . The Roaring
`Twenties brought the notorious speakeasys, a
`logical home for the ubiquitous slots, while the
`Depression years of the 1930's saw record
`productions and the most beautiful and brilliant
`machines ever designed , now highly
`collectable. The Golden Age of slots ended in
`1950 with the passing of far-reaching federal
`legislation confining their use . But the growth
`of casinos in Nevada and Atlantic City, plus
`recent legalization In more states, has resulted
`in a resurgence of the slot machine.
`Slots, highly regarded collectables, are
`not only a good investment, but are fun to play.
`Every important slot manufactured during the
`first 100 years is carefully represented both in
`text and by more than 600 photographs and
`newspaper articles, all serving to chronicle this
`colorful segment of Americana
`
`Certificate of Commendation
`American Association for State and Local History
`
`Farmlngbn Pu1J1i: L1Jtsy
`100 w. &roadway
`-·-- -- -- -
`
`~-- •--.- -
`
`IGT EX. 1009 - 2/34
`
`

`
`~~- ~~ ~
`
`-
`
`'
`
`F8Y I MARSHALL
`SLOT MACHINES:
`688
`
`7527
`
`FE:Y
`
`~11/lllll~llllllllllllll~
`
`0 01619 0 72001
`
`Farmington Public Library
`
`Revised, Updated, Fifth Edition
`
`Dedication
`"History has its great and near great warriors, its statesmen and
`its moral leaders. Coin machines too, have their great, near great
`and even [egendary characters from whence came our coin
`machines in the first place. They were Charles Fey, H.S. Mills,
`Adolph Caille and Thomas Watling. Each gave to posterity the
`benefits of a life of study and sacrifice in the field they liked best."
`r • . J • • 10AO
`
`- ' - • - -
`
`-
`
`' - - - · · - - '
`
`,......
`
`•
`
`a. 1
`
`IGT EX. 1009 - 3/34
`
`

`
`by Marshall Fey
`A Pictorial History
`of the First 100 Years
`
`First Printing 1983
`Second Printing 1989
`Third Printing 1991
`Fourth Printing 1994
`Fifth Printing 1997
`
`4250 South Virginia St.
`Reno, Nevada 89502
`
`Library of Congress Number 93-08104 7
`ISBN Number 1-889243-00-0
`
`Copyright© 1983, 1989, 1991, 1994, 1997 by Marshall Fey
`All rights reserved. No part of this book may be produced without written permission,
`except in the case of brief quotations embodied in critical articles and reviews.
`
`IGT EX. 1009 - 4/34
`
`

`
`Adopting Slot Machines
`for Casino Play
`
`The 1951 Johnson Act virtually eliminated slot machine sales in nearly all
`states, pushing its sales potential down to the lowest in the industry's history. The
`remnant market mostly consisted of Nevada with its rapidly growing casinos,
`England, West Germany, France, Sweden, Denmark, Norway, Australia and a few
`African and Asian countries. During the 1950's and early 1960's the three remain(cid:173)
`ing major manufacturers-Mills, Jennings and Pace-vied for sales in those areas.
`The Mills Bell-0-Matic Corporation, which had been manufacturing slots in
`their Reno plant since 1951, had a geographical advantage and a reputation for
`building a quality product. Unfortunately, they were hesitant to make any major
`changes in the High Top line, which had been first introduced with the JEWEL
`BELL in 1947. Until the end of the run in 1962, the High Tops still utilized the same
`basic mechanism as in their 1931 SILENT BELL. In the late 1950's the Mills firm
`finally offered a light-up High Top, with a western motif, and two additional light-up
`models named the THREE-7-CROWN and the FOUR-7-CROWN. These were
`three and four-reelers respectively, using an unattractive case which resembled the
`1933 Mills EXTRAORDINARY. Implementing the Crown series was definitely a
`case of too little too late, and was even poor competition for contemporary Mills
`machines. These machines were the last to use the out of vogue bell designation for
`the reel slot, although the firm continued to manufacture as the Mills Bell-0-Matic
`Company into the 1970's.
`The Jennings Company had become the innovative forerunner with their
`brilliantly illuminated and highly decorative SUN CHIEF series which culminated in
`their BUCKAROO. Introduced in 1955, this was the first post-war, four-reel
`machine and it offered a tantalizing 5,000-coin jackpot. This machine's outstanding
`success immediately prompted both Mills and Pace to develop four-reelers. As the
`multi-reel concept grew, Jennings was the only factory to offer a side-by-side
`double, which was a casino favorite in the 1960's. A single 20-stop, three-reeler had
`8,000 possible combinations, the four-reeler had 160,000, and with two three(cid:173)
`reelers Siamesed together, the number grew to 64 million combinations. Although
`the company had shrunk from 700 employees during its heyday of the 1930's to a
`mere 60 at the time of 0. D. Jennings' death in November 1953, the Jennings com(cid:173)
`pany still did very well in domestic and foreign sales, producing about fifty machines
`
`195
`
`Introduced in 1954 at the Las
`Vegas Sands Hotel, the ROTO(cid:173)
`SLOT, a circular cocktail table
`with a built-in Mills mechanism,
`could be played in six positions
`by lifting the knob on the right
`and rotating the playing unit.
`During the late 1950's and early
`1960's bu!lt-ln three reel slot
`bars were operating in Reno at
`the Golden Hotel and Mac's Club.
`
`IGT EX. 1009 - 5/34
`
`

`
`Mills 1958
`THREE-SEVEN-CROWN
`
`The Crown series,
`designed to compete
`with the brightly lit
`Jennings, received
`poor acceptance.
`
`daily. In 1955 the firm was purchased by American Machine and Science Com(cid:173)
`pany, a Chicago conglomerate owned by Wallace Carroll. The slot firm's acquisition
`paid for a good portion of the parent company's expansion, influencing it to further
`enlarge their gambling interests by purchasing both Mills Bell-0-Matic and J. H.
`Keeney and Company, plus Investing in part interest in the Tropicana Hotel in Las
`Vegas.
`The Pace machine, with few changes since the pre-war DELUXE COMET, had
`a quick succession of owners after Ed Pace retired in 1951 at age 74. Veteran slot
`manufacturer Harold Baker produced the Pace machine for the following two years
`until he died . The manufacturing of Pace slots was then continued by the Ace
`Manufacturing Company of Franklin Park, Illinois, by the
`father and son team of Casey and Norbe Michaels. In 1958
`they opened facilities
`in both Reno and Glen Burnie,
`Maryland, where slots were still legal in Anne Arundel,
`Calvert, Charles and St. Mary's Counties for another ten years.
`In 1961 the company folded, closing both branches. The Ace
`machine closely resembled its predecessor except for some im(cid:173)
`provements designed for casino use which included plastic reel
`strips, a large award card and a redesigned bottom front
`casting to accommodate a new large money tray. It was copied
`from the one already in use at Harold's Club, with a built-in
`drink holder and ashtray.
`The Michaels' greatest contribution to the casino slot came
`in 1956 when they developed the modern front-opening case.
`Access through the front alleviated the necessity of rotating the
`machine to get to the mechanism. Another popular innovation
`on the Ace front-opening case was the illuminated front door
`featuring two light-up plastic displays- a large one on the
`door's bottom for the payout awards and another above the
`reels for the club's logo. The new case was originally designed
`for Harold's Club, but the conservative Smith family chose to
`remain with the red Pace COMET which had been their
`hallmark since the late 1930's. Realizing the virtues of the
`front-opening Ace, the nearby Club Primadonria purchased a
`large number of them.
`Nevada Air Products, a Reno manufacturer, followed
`with the first all-steel case built primarily to recase Pace
`machines. When they ceased production Joe Baldechl, a former employee, con(cid:173)
`tinued making these cases. The need for a front-opening, light-up case induced
`some Mills operators to use a Pace coin head or a custom coin entry to adapt the
`Mills mechanism to the case, and these conversions were very popular during the
`early 1960's.
`By 1962 Mills was no longer the industry's pacesetter, but they were deter(cid:173)
`mined to regain that distinction. They tried to accomplish this with the introduction
`of an illuminated all-steel front-opening machine dubbed the Mills COMPACT. Its
`small case utilized the old mechanism resting on a pull-out baseplate on a rotating
`turnstile, allowing it to be pivoted for repair without removing it from the cabinet.
`These attractive new machines, costing between $600 and $700, sold well
`throughout Nevada. Many casinos bought them outright, while to remain current
`other operators recased their obsolete Mills High Top mechanisms in the COM(cid:173)
`PACT case. The following year Jennings began using a similar case and their parent
`company, American Machine and Science, to avoid competition purchased the
`Bell-0-Matic Corporation from the Mills family for $500,000 . The remaining Mills
`heirs at the time of the sale were the sole surviving brother Ralph, who died a year
`later, and Tony and John, sons of Herb Jr. who had died in July 1959. Trlner
`
`196
`
`IGT EX. 1009 - 6/34
`
`

`
`Scales, Jennings and Mills formed the T JM Corporation, with Keeney later joining
`the group to manage the coin machine division for the parent company AM & S .
`Bally Manufacturing, which had been in the coin machine business since 1931,
`introduced a revolutionary machine called MONEY HONEY in 1963. Using an up(cid:173)
`dated mechanism from their floor consoles cased in a front-opening cabinet, this
`new machine vaulted them into the casino slot market. A hopper payout unit was
`added, designated the "bottomless payout," with a capacity of 2,500 dimes. Bally
`added a larger hopper in the mid-1970's capable of holding 2,500 quarters. It had
`the capability of accurately paying out numerous variable sized jackpots as well as
`multiple coin and line pays, creating a major improvement over the 20-coin max(cid:173)
`imum of
`the slide pay. Bally's electro-mechanical
`machine utilized multi-contact boards which could sense
`more than 50 different payout combinations. These
`features led the way to multiple-coin, three and five-line
`machines, as well as left-to-right and right-to-left payouts.
`Shortly after the Bally slot invasion, the Space Com(cid:173)
`pany was reincarnated from the old Ace firm by Earl
`Missler in Glen Burnie, Maryland. They introduced an
`unsuccessful front-opening hopper-payout machine
`using the basic Pace mechanism. At Reno's Palace Club
`the short-lived machine had a tragic debut because the
`hoppers would involuntarily empty their loads of coins.
`The new company tried to continue with the mechanical
`Pace, but the diminishing market led to its failure within
`the decade. The Pace-Ace-Space line had finally expired
`after 40 years.
`In 1966 Vern Juenke introduced another new slot
`concept, the original solid state machine. Juenke , an in(cid:173)
`genious electrical engineer then working for Nevada Air
`Products in Reno, created the handleless machine which
`had only one moving part-the payout hopper. The pro(cid:173)
`totype model, with its symbols displayed by electronic
`read-out units , received a trial run in Reno's Liberty Belle
`and later at the California Hotel in Las Vegas. The
`machine operated flawlessly , but the unconventional
`operation received poor public acceptance, leading to the
`project's abandonment. Raven ·Electronics followed in
`1968 with a similar production model which also enjoyed
`only meager success .
`The Mills-Jennings group (T JM) , rapidly losing sales
`in Nevada to Bally, desperately endeavored to compete by making numerous
`machine model changes during 1965-1973. Mills first offered the hopper, mounted
`beneath the compact case, as an accessory to pay jackpots only. Later Mills incor(cid:173)
`porated the hopper inside the case eliminating the payout slides. In an attempted
`comeback Jennings developed the PANAMA, an electro-mechanical machine
`which adapted a hopper pay to a completely redesigned mechanism . The latter
`machines proved to be . unacceptable to the Nevada market, and so they were
`unloaded in foreign countries.
`In 1968 Mills built their first electro-mechanical slot, the MARK SEVEN, using
`the new Jennings PANAMA mechanism in a newly-designed steel case . They built
`fifty prototype machines and placed them on a trial basis In various casinos, but they
`were all returned with only two sold the following year, both discounted to the
`Liberty Belle. The rest of the machines were dismantled as that electrical com(cid:173)
`ponents could be used in the SIERRA, Mills' next ill-fated model. Introduced in
`1970, the SIERRA used the standard Mills mechanism and featured solid state
`
`197
`
`Ace 1956
`FRONT OPEN
`
`In tune with casino
`action, Ace was the
`first manufacturer to
`offer a front-opening
`case, a large illuminated
`award display, and
`plastic reel strips.
`
`IGT EX. 1009 - 7/34
`
`

`
`Mills 1962
`COMPACT
`
`Mills extremely successful
`front -opening case,
`using their standard
`mechanism, was
`miniaturized by putting
`the money bowl and
`the cash can in the
`stand below .
`
`modular components in an all new case. There were less than 500 of these slots
`manufactured with the majority again sold overseas. All these machine variations
`proved to be futile, as they still incorporated the obsolete payout fingers limited to
`only nine functions . It was impossible for these models to compete with the versatili(cid:173)
`ty of the new electric circuitry employed by Bally.
`The T JM Corporation realized that if they were to compete in the slot machine
`industry they needed a machine with the appeal and diversity of Baily's. In the fall of
`1973 they responded with the Jennings 400 series, a line of electrics featuring solid
`state modular components, contact circuit boards which replaced the payout
`fingers, and motor-driven reels stopped by solenoids. The first experimental model,
`a five-line CRISS CROSS, was originally tested at the Liberty
`Belle. The 400 series was not an instant success, although as
`refinements were made they gained impetus and enjoyed many
`sales in Atlantic City. In February 1977 T JM shut down the
`Linden Street factory in Reno and moved the equipment to
`Chicago where slot manufacturing continued. The same year Joe
`Finnegan bought
`the distributorship of the Mills-Jennings
`machines. He acquired the manufacturing rights
`in 1979,
`operating as the OTX Corporation with himself as major
`stockholder. With the introduction of the Jennings electric, T JM
`discontinued manufacturing the Mills Line with the exception of
`filling overseas military orders. The company turned out the last
`Mills machine in 1979, then sold the tooling two years later to
`Ben Coleman of Sparks, Nevada. Doing business as Ben's Coin
`Machine Service, Coleman manufactured replacement parts for
`collectors who possessed innumerable Mills machines which had
`been built since 1931.
`In 1973, with Pace gone and Mills removed from the
`domestic market, the Jennings machine remained as the only
`competition to the Bally giant. During that year the J. P. Seeburg
`Corporation introduced another electro-mechanical slot. Well(cid:173)
`known since 1907 as manufacturers of coin-operated pianos,
`juke boxes and amusement machines, Seeburg's venture into
`slots proved to be little competition until 1978 when New Jersey
`legalized gaming. The company renamed its slot division GDI
`(Gaming Devices Inc.) and briefly enjoyed fair sales. Also enticed
`by the New Jersey market and entering into the manufacture of
`microprocessor slot machines were Concorde (Encore Industries
`Inc.), Gamex Industries Inc. , Omega Products and Summit
`Systems Inc. In the mid-1970's Fortune Coin Company, formed by Walt Fraley and
`Stan Fulton , developed the first video slot. International Game Technology (!GT)
`purchased the company in 1978, which soon utilized the long-odds capability of a
`video slot to promote the giant jackpot craze of the early 1980's. In 1982 !GT began
`distributing the Ainsworth REEL machine made in Australia. Bell-Fruit Manufactur(cid:173)
`ing , an English company which produced both microprocessor reel and video slots,
`also entered the Nevada and New Jersey markets.
`The basic mechanics of the bell slot remained virtually unchanged from that of
`the original LIBERTY BELL machine until Baily's popularization of electricity in slot
`machines in the mid-1960's. Since then there has been a number of transmutations;
`changes have been in the hopper pay, minimized mechanical components, and
`almost universal multi-coin play, a feature which has magnified both player appeal
`and the machine's earning capacity. In the 15 years from 1965 to 1980 the number
`of slot machines operating in Nevada has multiplied three and a half times and the
`annual earnings have soared from approximately $100 million to more than a
`
`198
`
`IGT EX. 1009 - 8/34
`
`

`
`billion. Prices have increased in similar proportion. In 1967 a single coin Bally
`model 742 cost only $795 and the five-coin 809 multiplier brought $895. In 1982
`the electro-mechanical 809 sold for $2,800, the E model counterpart brought
`$3,400 and the wide-reel dollar slot costs $5, 195. Similarly, a Jennings model 721
`starts at $4 ,400.
`
`Another consequential change has been the continued escalation of player
`win. Before 1950 the general payout percentage was under 80%. The standard
`payout of a pre-1975 Bally machine was 84-85%, with an optional liberal percent(cid:173)
`age of 87-88%. This changed drastically with the success of the 93-97% high-win
`dollar machines, popularized after 1976, which influenced competitive casinos to
`alter the payout of smaller denomination machines. In the summer of 1980 Harold's
`Club in Reno started an advertising campaign flaunting high slot
`pay-back up to 97.5% to the customer. Today they claim there
`are no longer any machines in the club that retain more than eight
`percent.
`The popularity of casino slots also has continued to soar. In
`mid-1983 a survey revealed that given the choice, 37% of the
`patrons preferred to play slot machines. The casino's former most
`popular games, twenty-one and craps, trailed badly at 22% and
`16% respectively. The slot machine in the casino age has come
`alive!
`
`Bally Revolutionizes the Casino Slot
`
`In 1963 Illinois repealed its law prohibiting the manufacture
`of gambling devices, thus enabling Bally of Chicago to produce
`bell machines which would ultimately revolutionize the casino
`slot. The end product was an adaption of features they had first
`used on the 1941 CLUB BELLS console, a three-coin multiplier
`which they continued to use for another ten years until the im(cid:173)
`plementation of the 1951 federal Johnson Act. After 1963 Bally
`used the same basic mechanism as well as the electro-mechanical
`circuitry, multiple-coin play, and a payout unit capable of dis(cid:173)
`pensing numerous different pays in various amounts.
`Conversion of these features from a console slot to a casino
`slot was reasonably simple once Bally had perfected the hopper
`payout, which replaced the single-coin slicer used on all the early
`console machines. With only a few refinements, the mechanism
`was fitted into a front-opening case, thus spawning the modern
`casino slot. The first machines, developed from their original
`MONEY HONEY made a large impact upon Las Vegas in 1964.
`The dynamic impact occurred in 1967 when they introduced the 809, a five-coin
`multiplier, following a year later with the 831, the first three-line machine. These
`two slot machines popularized the multiple-coin play now universally adopted in
`casinos.
`By 1969, though in the slot manufacturing business only six years, Bally vir(cid:173)
`tually monopolized the Nevada market for new machines. Their immense success
`was due to the electro-mechanical circuitry and the large reserve of coins in the hop(cid:173)
`per which was capable of paying the numerous jackpots obtainable in multipliers
`and the multi-line machines. Meanwhile the long established Mills and Jennings
`firms maintained the awareness of an ostrich, refusing until 1973 to abandon the ob(cid:173)
`solete pay fingers which severely limited the variety of machines which they could
`build . Their new machine development was unimaginative, resorting to imitation
`and offering only three, five and eight coin multipliers plus a double progressive.
`
`199
`
`Bally 1967
`809
`
`A landmark machine, this
`first factory built
`5-coin multiplier set the
`stage for universal
`multiple coin play.
`
`IGT EX. 1009 - 9/34
`
`

`
`Bally 1968
`831
`
`ll:::IIi:m'
`'
`·.-1.r..
`·'!'.I
`I ~ :
`
`ri:::
`:ft
`r:::-
`
`In stark contrast, Bally Manufacturing was a master of innovation , develop(cid:173)
`ment, manufacturing and salesmanship, all of which had been perfected during
`their long-time leadership among pin games, arcade machines and numerous
`pre-1950 coin-operated gaming devices . The Chicago factory received a large input
`for designing new machines from C. D. "Doc" Kaufman , Nevada's Bally factory
`representative, and Si Redd, owner of the Bally Distributing Company in Nevada.
`Redd purchased the Reno distributorship in 1967 from Dick Graves, former owner
`of the Sparks Nugget, and the Las Vegas distributorship from Mickey Wichinsky five
`years later. In 1971 "Handsome but Honest" John Wylie opened a branch office in
`Elko to serve that community and the rapidly developing northeast border towns.
`Bally bought back the distributorships in 1975 with Redd re(cid:173)
`maining on as president for another three years.
`The resulting deluge of different machines, unparalleled in
`the development of the bell slot, continued in 1969 with the
`847 CONTINENTAL, a four-reel six-coin multiplier which
`pioneered the left-to-right and right-to-left pay; the 873, a five(cid:173)
`line machine ; a complete line of multiple-coin progressive
`slots; the 1005, a three-line five-coin multiplier that accepted
`up to 15 coins; and the 1019 BIG WIN, a five-reel six-coin
`nickel machine which offered a $3,000 jackpot. Another im(cid:173)
`portant first occurred in 1975 when Bally transformed a single(cid:173)
`coin 742 into a high percentage payout jackpots-only dollar
`machine. A circle of these machines were placed in Karl's
`Silver Club in Sparks in February 1975, giving birth to the first
`dollar carousel. This concept was a tremendous success,
`although the frequency of payouts required two attendants to
`keep the hoppers full.
`The dollar machine play boomed when Bally followed
`with the 1088, 1090, 1091 and the 1096, a series of high-pay
`frequency machines which created phenomenal player appeal.
`The wide three-reel mechanisms used with these slots were
`placed in a five-reel cabinet. Later in 1976 Bally introduced
`companion low-boy models using an intermediate reel size in a
`four-reel cabinet. Both of these configurations enormously
`popularized the dollar machine play, and carousels sprang up
`in casinos throughout the state . These machines were also ex(cid:173)
`tremely popular as quarter machines, with the reel combina(cid:173)
`tions later adapted to nickel play.
`The next well-received application of dollar play was in
`1980 with the model 1202, a five-reel three-coin progressive
`which was utlized in multiple-machine installation tied to a common progressive
`unit. The "link progressive" carousels made possible giant jackpots of up to
`$385,000 as offered in the Hilton Hotel's "Pot of Gold." The ultimate machine for
`"high rollers" came in 1982 when a single-coin, four-reel Bally was rebuilt for the
`Tropicana Hotel in Las Vegas to accept a $100 token made of one troy ounce of
`. 999 fine silver. The awards , using baccarat symbols, are four 2's pay $500; four S's
`= $2,000; four 8's = $80,000; and four 9's = $90,000 .
`During the 1970's Bally manufactured about 90% of the slot machines used in
`Nevada and outsold any single competitor in Atlantic City. Their machines are also
`distributed In every foreign country where slots operate legally, making their
`overseas sales even larger than the domestic ones. To update their machine and
`maintain a competitive lead, the Series E was introduced in 1980, which replaced
`the electromechanical circuitry with a microprocessor. To the player, Baily's new
`slot operates like any of the previous models, with the same familiar "feel" of the
`handle and reel action . The advantages of the electronic slot are increased security,
`
`200
`
`The 3-/ine concept,
`previously used on
`consoles, soon became
`a standard feature
`in the industry .
`
`IGT EX. 1009 - 10/34
`
`

`
`reliability , simplified maintenance and a greater versatility of machine variations.
`The Series E made possible the 1212, the first ten-way machine, a five-line model
`which pays left-to-right and right-to-left. Fifty different E models were available two
`years after its introduction, and the Bally firm plan to offer up to 250 model varia(cid:173)
`tions in the future.
`In 1982 the Sound Machines, a new line of E models, were designated as the
`2000E Series. A music chip added to the microprocessor provided a brief melody
`with each coin insertion, again when the reels spin and once more with each
`payout. These attention-getting slots are accompanied by brilliant futuristic graphics.
`The Bally video slot was approved by the Nevada State
`Gaming Commission in December of 1982. Early the following year
`these machines were enhanced with clever animation, a practice
`already in use in their video arcade games. When a cherry pay is hit,
`three smiling faces appear on the fruit; on a bell award the clapper
`clangs back and forth; and when the bars align jackpot symbols ex(cid:173)
`plode. The Buck Rogers Age has visited the slot machine!
`The first Bally video carousel was installed in the Las Vegas
`Golden Nugget. The 22-machine link progressive jackpot was
`started at $1,001,000, tantalizing players with the dream of be(cid:173)
`coming an instant millionaire.
`Bally, operating initially as Lion Manufacturing Corporation,
`has enjoyed instant success from the time they introduced their first
`machine, a pin game called BALLYHOO, in 1931. Ray Maloney,
`founder and president for almost three decades until his death,
`oversaw an endless string of amusement devices which included ar(cid:173)
`cade equipment, kiddie rides, beverage vendors, popcorn vendors,
`gun games, bowling and shuffleboard machines. In the gaming field
`before the Johnson Act of 1951, Bally produced numerous counter
`games, horse race machines, console slots, trade stimulators and a
`combination nickel-quarter slot called the DOUBLE BELL.
`·
`In 1962 the Bally company was purchased by a group of in(cid:173)
`vestors headed by William O'Donnell, who had been the sales
`manager since 1958. The progressive company continued on with
`their large variety of coin-controlled machines, and innovation ex(cid:173)
`ploded in the mid-1960's with the development of numerous pace(cid:173)
`setting slot machines. In December 1979 Bally further diversified by
`opening Park Place, a $300 million resort hotel casino complex in
`Atlantic City, New Jersey . This proved to be unfortunate for O'Don-
`nell, as he was denied a license by the New Jersey Casino Control Commission,
`forcing him to divest his interest in Bally and resign as board chairman. He was re(cid:173)
`placed by Robert Mullane. In 1981 Bally produced 96,000 Pac-Man machines, the
`biggest-selling video game ever until they sold more than 110,000 Ms. Pac-Man
`machines the following year.
`Operating Baily's Park Place in Atlantic City introduced Bally to the potential
`of the hotel casino business . In the mid-l 980's they increased their gaming
`properties purchasing the MGM Grands in Las Vegas and Reno - renaming them
`Bally's. In 1988 they acquired their fourth casino, the Atlantic City Golden Nugget,
`from Stephen Wynn . Concurrently, Bally began losing their monopoly in the pro(cid:173)
`duction of slots after the advent of stepper driven reel machines. They received
`strong competition in this field from new companies that included Casino Electronic
`Inc., Sigma Games, Takasago, and especially International Game Technology and
`Universal Distributing. All the former manufacturers plus several others are also
`vying for the fast growing video slot market, which includes the increasingly popular
`draw poker machines.
`
`201
`
`Bally 1969
`CONTINENTAL
`
`A third dynamic change,
`left to right and
`right to left pay,
`revolutionized the format
`of modern bell slots .
`
`IGT EX. 1009 - 11/34
`
`

`
`Mills, Jennings & Keeney: Former Greats Merge
`
`In 1930 Jennings developed the first electrically operated bell machine, the
`short-lived ELECTROVENDER. It was unique in that a motor activated the
`mechanism while a button replaced the handle. The Bally firm 33 years later return(cid:173)
`ed to electricity, introducing a free-spinning reel bell slot utilizing electro-mechanical
`circuitry and hopper pay, making possible many machine variations. In an attempt
`to emulate their competition, both the Mills MARK VII and the Jennings PANAMA
`adopted the electro-mechanical circuitry and hopper pay in the late 1960's, though
`unfortunately retaining the obsolete payout fingers which limited the different
`models which they could build.
`The T JM Corporation, owner of both Mills and Jennings, realized the need for
`an updated machine to compete with Bally. They discontinued both the Jennings
`and Mills electro-mechanical machines to pool all of their efforts into an all-new Jen(cid:173)
`nings slot. The model 400, introduced In 1973, featured advanced solid state
`modular components with motor-driven reels and solenoid-actuated reel stop arms.
`This machine emerged seven years ahead of the electronic Bally Series E, but unfor(cid:173)
`tunately Jennings lagged an equal number of years behind in exploiting the poten(cid:173)
`tial of possible machine variations available with electronic circuitry.
`During these seven years the models offered were limited to a single-coin; 2, 3,
`and 5-coin multipliers a double progressive and 3 and 5-line machines. They did
`not capitalize on left-to-right and right-to-left pay, wide reels, or the high-frequency
`dollar slots with which Bally had been so successful. The company remedied this
`situation In 1980 when they introduced the 721 series, offering all of these features.
`The Jennings 400 was developed by the T JM Corporation, a subsidiary of
`American Machine and Science owned by Wallace Carroll. The parent company
`purchased the Triner Scale, Jennings, Mills and Keeney companies, all coin(cid:173)
`operated machine manufacturers, and combined them to form TJM. In 1977 the
`corporation closed the Mills factory at 135 Linden Street in Reno and moved all the
`Mills and Jennings tooling to Elgin, Illinois where they continued to manufacture the
`Jennings Electric. In December of the same year the OTX Corporation, later renam(cid:173)
`ed Mills Jennings, headed by Joseph Finnegan, purchased the Nevada distributor(cid:173)
`ship rights to the T JM machines. They opened an office with a warehouse at 120
`Linden Street, Reno, and the following year opened another office in Las Vegas. In
`January 1979 OTX became the distributor for Jennings machines in New Jersey
`and three months later purchased the T JM Corporation from AM&S , with the latter
`retaining 28% ~(the common stock.
`The poor sales of the Jennings 400, hindered by a limited number of models,
`reached a low in 1977 with total annual revenue of $17,458. The following year
`Reno's growth boom soared sales to $2. 7 million but this dropped the next year to
`$1.1 million when production was curtailed during ownership transition. OTX's
`banner year of 1980 saw the sale of 1,500 machines with revenues of $8.8 million .
`The dramatic increase in business resulted from the New Jersey Casino Control
`Commission adopting a regulation which provides that no casino may purc