Slot machines started in New York, in 1891. The first were designed by Pitt and Sittman, and had five drums that displayed poker hands. There was no payback mechanism, so the places in New York that bought the machines, paid in prizes of their own, usually free drinks.
Then came Charles Fey. He made the first slot, the Liberty Bell, in his basement. The slot machines didn't get widespread success until years later when they were put in the Flamingo Hilton hotel in the Las Vegas strip.
Fey's first slot machine was different than anything made today. It was over 100 pounds of cast iron, and lacked the fruit symbols common associated with slots. Instead it had star, horseshoes, and suits from playing cards, like diamonds and spades. The Liberty Bell gave a fifty cent payout to winners, which was substantial in its day. The Liberty Belle Saloon and Restaurant in Reno still has the very first Liberty Bell designed by Fey. The establishment is owned by his grandchildren, who preserve Fey's legacy in the history of slot machines.
Then Fey made the Operator Bell Slot machine. This slot features the famous fruit design, and became the standard for slot machine aesthetics. The history of slot machines was changed forever. As anti-slot machine sentiments began to raise, Fey had to be clever, and he designed many machines to work like vending machines. This would later be to the bane of owners of vending machines, as the public often confused the two, and police capitalized upon this when they needed good press. The Bell-Fruit Gum Company, reputed to have stolen a slot machine from Fey, was the first to mass produce machines that dispensed gum for every pull in order to mask the nature of the slot machine. This is where the BAR symbol comes from. It was an effort to market their gum.
The anti-gambling movement, piggybacked on the temperance movement proved to be trouble for Fey. Slot machines be came illegal in San Francisco in 1909 and in Nevada a year later. By 1911, they were banned by the state of California. By the thirties, it was politically popular to be anti-gambling, and especially anti- slot machine.
New York Mayor Fiorello LaGuardia had a photo op on barge dumping New York City's machines at sea. Most of the machines weren't even slot machines, and were nothing more than common vending machines. The city had confiscated many legitimate vending machines in order to score a public relations coup. It was a black day in the history of slot machines. (info from Slots.cd) (photo from earlyvegas.com)