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, Charles Fey created 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 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 and the Sega Bell

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.

Service Games spent the first ten years of its existence distributing American-made amusement 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), however around 1956, Service Games, Japan decided to get into the slot machine business. Its methods in doing so, however, are controversial; Service Games chose to take a pre-existing model of slot machine, in this case the late-1940s High Top design created by the Mills Novelty Company (at this point known as Mills Bell-O-Matic) and resell the product, without any agreements or licensing from Mills, as the Sega Bell.

It is thought Sega Bells came into existence in two ways; either by mass purchasing machines from Mills from their Chicago headquarters or factory in Reno, Nevada, or by acquiring incomplete or broken models from other parties. Any parts that were missing or needed replacing would be manufactured by Service Games' factory in Japan, then sold on as "new" units for presumably less money. Service Games would go one step further, however, by pretending to be an official Mills distributor and using Mills' "owl" trademark.

Mills got wind of this situation in late 1957 and began warning customers of unlicensed clones of their machines coming from Japan, later explicitly mentioning Service Games in advertising and alongside the misuse of its trademark. Service Games seemingly stopped using the owl in the months that followed, but production of Sega Bells continued.

The result of this debarkle was twofold; Service Games was able to profit from markets Mills had not yet touched (later establishing distribution channels in the United Kingdom and The Netherlands), but it also prompted Mills to start "officially" distributing its products worldwide. Different legal juristictions meant that Mills could not stop Service Games producing clones of their products (or use their trademarks); they could inform customers that Service Games products were not legitimate, but could not halt production.

Service Games would also produce its own version of Mills late 1930s "portable" Vest Pocket machine, as the Mini-Sega. Ironically despite being manufactured in Japan, it is not thought Service Games could (legally) sell in this territory as gambling was prohibited.

1960s machines

In 1960 Service Games, Japan was split into two entities; Nihon Goraku Bussan (distribution) and Nihon Kikai Seizou (manufacturing). Perhaps being unlikely to source new sot machines designs from the US, Nihon Kikai Seizou, now trading as Sega, decided to create its own, creating the Star series in the early 1960s. These units are thought to have been produced entirely in Japan with no relation to Mills.