History of Sega/Slot machines
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Background
Coin-operated gambling machines date back to the 1880s, appearing in bars across the United States of America before spreading to other parts of the developed world during the early 20th century. Early examples, such as a device manufactured by Sittman and Pitt of New York, attempted to simulate card games such as poker - five "drums" (or "reels") would spin and "randomly" land in positions to simulate a hand, and depending on the outcome, prizes could range from free drinks to pieces of chewing gum or cigarettes, physically handed out by bar staff.
In 1889[1], Charles Fey created[2][3] the Liberty Bell which with its simpler rule set and three drums, meant the payout process could be automated. "Bell" machines (named after the Liberty Bell symbol which featured on the drums) became extremely popular, and over the coming decades, companies would clone and improve on the formula, developing a highly profitable gambling industry in the process, with units appearing in bars, cigar shops, bowling alleys, barber shops and even brothels.
One such company to capitalise on the boom was the Mills Novelty Company, founded in Chicago by Herbert Stephen Mills in 1891. Mills worked[4] with Charles Fey to mass produce his device as the Mills Liberty Bell, starting in 1907. In 1910, they would improve the design as the Operator Bell, giving it a vertical handle and adding pictures of fruit to the rotating reels (replacing what had then been card suites). This, incidentally, is where the term "fruit machine" comes from - a term still widely used in markets such as the United Kingdom.
The advent of the first world war diverted attention away from coin-operated amusement devices, but in the 1920s and 30s the sector would see an economic boom. One such man to capitalise on the wave was Irving Bromberg, who founded Irving Bromberg Co. and later Standard Games Co. during the 1930s, producing and servicing amusement equipment. In 1946, a new Bromberg venture began with Service Games, Hawaii.
Service Games
To this day, gambling provokes a mixed response from the general public, and as coin-operated gambling devices rose to prominance in the 1920s, so did demands for America's governing bodies to regulate the sector. States tackled the issue in different ways - some imposed tough restrictions on payouts, others placed age limits on machines, and some chose to ban gambling machines altogether. Where such machines weren't being restricted, competition was dominated by big, usually Chicago-based, firms - it was a lucritive, but fierely competitive market.
Service Games, founded by Bromberg, his son Martin Bromley and friend James Humpert was founded in the US-owned Territory of Hawaii (which would not receive statehood until 1959) that was not subject to many of these restrictions. They also noted that following the US' Pacific campaign during the war, the country had military bases spread across occupied territory through much of south-east Asia - an untouched market to sell products to.
In 1956 Service Games struck a deal with the Mills Bell-O-Matic Corporation (spun off from the original Mills slot machine division in 1946) to distribute its High Top machines in the "Pacific Ocean area" (which at the time included Japan, Korea, Formosa (modern day Taiwan), the Philippines and the Japanese islands of Okinawa). Initially exporting the machines straight from Chicago, Service Games would later establish a factory to produce the High Top in Japan, renaming the product the Sega Bell.