Historical Interlude: The History of Coin-op Part 5, Consolidation and Stagnation

During the Depression the coin-operated amusement business flourished by virtue of being cheap.  With every last cent precious, a pinball machine that could provide a few minutes entertainment for a mere penny was the closest thing to a luxury many people could afford.  In the 1950s, however, the economy was booming, the population was growing and dispersing, and there were many new activities to occupy the time of the prosperous suburban middle class.  As a result, coin-operated games morphed from the star attraction of the Sportland to a mere sideshow at a fun spot or department store playland.

Immediately after World War II, it appeared that the coin-operated amusement industry was poised to enter another boom period as manufacturers entered the post-war era with both better equipment and larger manufacturing capacity due to wartime innovations and operators needed to replace roughly ninety percent of the estimated 5,000,000 pinball machines, coin-operated games, vending machines, and jukeboxes in operation at the start of the war. Instead, operators drove themselves to near bankruptcy in 1946 and 1947 trying to replace old machines, while manufacturers continued to increase production through the end of the decade only to discover that distributors and operators could no longer afford to buy from them. As demand for new games fell, the industry began to consolidate as the 1950s progressed until by 1965 what had been over a dozen major manufacturers at the end of World War II were whittled down to just five.  While the remaining manufacturers still released a constant stream of product in the 1950s and early 1960s, many of these games began to lack originality, with companies merely incorporating minor changes into existing concepts each year.  This placed the industry in danger of stagnating entirely by the middle of the 1960s.

This is the penultimate chapter in a six-part examination of the coin-operated games industry before the dawn of the video game era.  Principle sources this time around include Pinball 1: Illustrated Historical Guide to Pinball Machines by Richard Bueschel, The History of Coin-Operated Phonographs. 1888-1998 by Gert Almind, Special When Lit: A Visual and Anecdotal History of Pinball by Edward Trapunski, King of the Slots: William “Si” Redd by Jack Harpster, Bally: The World’s Game Maker by Christian Martels, the article “A Profits Jackpot in Slot Machines” in the March 13, 1977, edition of the New York Times, the article “Gaming Giant Has Checkered Past, Local Ties” in the July 15, 1979, edition of the Boca Raton News, the article “The Seeburg’s Term It Automatic Record Playing, But the Public Calls It the Jukebox” in The American Swedish Monthly, the article “Money in the Box” in the October 27, 1958, edition of Time Magazine, numerous articles from the 1950s and 1960s in Billboard Magazine, the Internet Pinball Machine Database, Bally’s official history from its (now defunct) company website, In re Bally’s Casino Application, 10 N.J.A.R. 356 (1981), and the research and personal recollections of British operator and coin machine historian Freddy Bailey.

The Rise of the Jukebox

The Wurlitzer Model 24 (1937), one of the most successful jukeboxes before World War II

Coin-operated music machines were a mainstay of arcades from the very beginning, with phonographs in particular being one of the major draws of the earliest amusement parlors of the 1890s.  After the phonograph came down in price enough that practically anyone could afford one, it largely disappeared from the arcade scene, but other musical devices took its place.  Perhaps the most popular machines in the early 1900s were the coin-operated player pianos and organs.  These could be quite elaborate at times, as epitomized by the Mills Violano Virtuoso, invented by Henry Sandell, which combined a self-playing violin and piano in a single large cabinet and sold between 4,000 and 5,000 units between 1911 and 1930.  The advent of electrical recording, however, pioneered at Western Electric in 1924, greatly increased the quality of recorded music while also allowing the playback of recordings to be amplified.  This posed a significant threat to the instrument manufacturers, a challenge first answered by the Automatic Musical Instrument Company (AMI).

AMI began life as two closely linked companies in 1909, the National Piano Manufacturing Company, which built coin-operated musical instruments, and the National Automatic Music Company, which operated them.  Its most prominent product in its early years was a player piano that could automatically switch between eight different music rolls, and by the mid 1920s the companies had around 8,500 machines on location.  In 1925, the two companies merged into one corporate entity, but did not adopt the name AMI until 1927.  That same year, AMI introduced the National Automatic Selection Phonograph, a record player hooked up to a loudspeaker and a selector that could switch between ten records.  The AMI unit was not the first multi-selection record machine, but it was the first device to combine a record player, a selector, loudspeaker amplification, and a coin slot.  By 1930, 12,000 Automatic Selection Phonographs had been installed, and a new segment of the coin-op industry was born.

In the 1930s, several prominent coin-op manufacturers tried their luck at the Jukebox business including Mills and Rockola, but the leading company was Wurlitzer, a musical instrument manufacturer founded by Rudolph Wurlitzer in 1853 in Cincinnati, Ohio.  Starting as an importer of European Instruments, the company became a major manufacturer by supplying instruments to the United States Army during the American Civil War.  When the first fairground organs began to appear in the 1890s, Wurlitzer invested in one of the early manufacturers, the North Tonawanda Barrel Organ Factory, in 1897.  In 1909, Wurlitzer bought the company outright, shifted all production to New York, and developed an organ for motion picture houses that proved highly successful after being released the next year.  With electrical recording paving the way for “talkies” in the cinema and thereby making theater organs redundant, Wurlitzer nearly went out of business in the late 1920s and turned to jukeboxes through purchasing the Simplex Manufacturing Company in 1933, which had developed a multi-selection unit.  Simplex owner Homer Capehart became the general manager of Wurlitzer and guided the company back to success.  By 1936, Wurlitzer had placed 44,000 jukeboxes on location, and the company continued to dominate the market until the late 1940s, when it was dethroned by the J.P. Seeburg Corporation.

The Seeburg M-100A,which revolutionized the jukebox business in 1948

Born in Gothenburg, Sweden, in 1871, Justus Sjoberg completed a course of study at the Chalmers Technical Institute and then immigrated to the United States in 1887.  In the U.S., he took classes at a Chicago night school, studied technical subjects at the Lewis Institute, and took drawing and design classes at the Chicago Art Institute.  When he became a naturalized U.S. citizen in 1892, he changed his last name to Seeburg.  Seeburg’s first job in the United States was at the C.S. Smith & company piano factory in Chicago, where he learned the musical instrument manufacturing trade.  Several years later, he became the superintendent at another piano maker, the Cable Company, before joining with a partner to establish the Kurtz-Seeburg Corporation in Rockford, Illinos, to manufacture piano actions.  In 1902, he returned to Chicago to establish the J.P. Seeburg Piano Company, which enjoyed great success as a manufacturer of coin-operated pianos and theater organs.

When AMI debuted the National Automatic Selector Phonograph, Seeburg responded in 1928 with its own eight-record machine, changed its name to J.P. Seeburg Corporation to distance itself from its musical instrument roots, and switched its focus to the jukebox business. The Depression hit Seeburg hard, however, and forced the company into receivership in 1931. In response, Justus expanded his company into nearly every device that could be based around a coin slot, including vending machines, washing machines, parking meters, and arcade pieces like the Rayolite gun games, which restored the company’s financial situation by 1934.  That same year, Justus entered semi-retirement and his son, Noel Marshall Seeburg, took over as president.  Seeburg remained number two in jukeboxes until 1948, when it deployed the M-100A, the first jukebox able to play one hundred different selections.  Arriving just before the advent of high quality multi-track tape recording technology, the introduction of the small and durable 45 rpm record, and the explosive popularity of Rock ‘n’ Roll, the 100A completely transformed the coin-operated machine industry and allowed Seeburg to corner 70% of the jukebox market by 1960.

By the mid-1950s, over 500,000 jukeboxes had been installed across the United States, and the sale and operation of coin-operated music and games, largely separate before World War II, consolidated around the music distributors and operators, who placed an emphasis on jukeboxes installed at bar and tavern locations, leaving comparably little room for less profitable classes of machines.  This power shift is perhaps best reflected by changes in the trade organizations of the period.  The coin-operated machine industry first organized nationally during the resurgence of the late 1920s, rallying around the first industry trade magazine, Automatic Age, which started publishing in 1925, and the first nationwide trade organization, the National Vending Machine Operators Association, established in 1926 through the efforts of Chicago coin-operated scale manufacturer and operator E.H. Funke.  The association held the first national coin machine trade show that February at the Great Northern Hotel in Chicago, which became an annual tradition.  The show took place in Chicago in even-numbered years and another major city like Cleveland or Detroit in odd-numbered years, but in 1931 the manufacturers revolted, tired of paying freight to bring their products to other cities when they were nearly all located in Chicago already.  These companies therefore banded together to create the National Association of Coin Operated Machine Manufacturers — later shortened to Coin Machine Industries (CMI) — which hosted an increasingly lavish and well attended coin machine show at the Sherman Hotel in Chicago through the rest of the 1930s.

After World War II, CMI fell apart.  The vending machine trade came into its own during World War II as factories installed food and drink machines to help workers keep up their strength while churning out military equipment.  Feeling their oats, the manufacturers of those machines broke away to form the National Automatic Merchandising Association and launched their own show in 1946, which routinely outdrew the CMI coin show in the late 1940s.  That left amusements and jukeboxes for CMI, but the jukebox makers never liked exhibiting at the coin show because they were forced to turn down the volume of their machines and had a difficult time selling them to potential customers.  The jukebox makers increasingly retreated to private suites in neighboring downtown hotels to show their products, and as the jukebox grew ever more influential in American daily life, the companies involved in the business increasingly felt they no longer needed the CMI.

Two events cemented the end of CMI.  First, the organization announced in 1949 that it would no longer represent companies like Bally that produced payout machines.  In protest, Bally president Ray Moloney organized a new trade organization, the American Coin Machine Manufacturers Association (ACMMA), which announced its own trade show set for May 1950.  Meanwhile, jukebox route operators George Miller of Oakland, California, and Al Denver of New York City forged a loose collection of state and local operators associations into an alliance called the Music Operators of America (MOA) in 1948 to combat efforts to eliminate the traditional music royalty exemption afforded to jukeboxes.  In 1950, the MOA decided to stage its own trade show in November, and CMI, which now stood for Coin Machine Institute, cancelled its show that June when it became clear that distributors and operators did not want to attend another convention so soon after the ACMMA show and were far more interested in clustering around the jukebox and record companies at the MOA convention later in the year.  The short-lived ACMMA disbanded in 1951, while CMI tried one more time to stage a show in 1952, but the show floor was largely filled with purveyors of kiddie rides, and attendance was poor.  As CMI floundered before the onslaught of the jukebox, the industry it represented also began to shrink.

Death and Turmoil in Amusements

J. Frank Meyer, who led the Exhibit Supply Company into coin-operated machines

In August 1948, Jack Keeney, the pioneering head of J.H. Keeney and Company, passed away not long after suffering a debilitating stroke.  J. Frank Meyer, the man who turned the Exhibit Supply Company into a coin-op powerhouse, died that November, just a few months after his trusted sales manager Perc Smith.  In 1953, Dick Hood passed, and the Hood family relinquished control of H.C. Evans and Company for the first time.  In 1956, William Rabkin, founder of the constantly innovating International Mutoscope, died in a fall from the window of his sixth floor apartment, possibly due to a dizzy spell brought on by high blood pressure.  Once vital contributors to a thriving coin-operated amusement business, these companies bereft of their founders and/or primary movers soon looked for greener pastures.  International Mutoscope filed for bankruptcy in 1960 and while it managed to limp along for a few more years was never a potent force in the business again, while H.C. Evans attempted to enter the surging jukebox business by purchasing the Mills phonograph division in 1948 and failed so miserably that the company was forced to close in 1955.  J.H. Keeney chose to focus on vending machines and slots and slowly decreased its amusement output before releasing its last pinball game in 1963, while even Exhibit Supply, which under Meyer had blossomed into the leading amusement manufacturer of the 1920s, chose to focus on other areas of manufacturing.

During World War II, Exhibit had developed a new switch, the electro-snap, that proved so useful that the company created a subsidiary called the Electro-Snap and Switch Manufacturing Company to continue selling switches to the military after the war.  By 1957, the switch business completely overshadowed Exhibit’s dwindling amusement business, so the company chose to end amusement equipment manufacturing and give the factory space over to Electro-Snap.  This led to the resignation of company president Sam Lewis, one of a series of short-lived caretakers to run the company after Meyer’s death, and the appointment of arcade division head Chester Gore to run the company.  As Exhibit card vendors continued to be popular, Gore moved the company to a larger factory in 1960 to commence manufacturing of card machines again, but it never returned to other amusements.  Gore continued to run the company until selling out to a man named Paul Marchout in 1979, who was only interested in the name and effectively shut the company down.

The most shocking industry death of the decade occurred on February 26, 1958, when Ray Moloney, president of the Lion Manufacturing Company and its Bally subsidiary, died suddenly of a heart attack at fifty-eight.  From the launch of Ballyhoo in 1932, Moloney had built Bally into one of the largest and most important coin-operated amusement companies, a fully integrated manufacturer of slot machines, payout pinball machines, shuffle alleys, kiddie rides, and various other arcade pieces.  Bally not only manufactured coin-operated machines, but through a host of subsidiaries such as the Grand Woodworking Company, Como Manufacturing Company, Ravenwood Screw Machine Corporation, Comar Electric Company, and Marlin Electric Company, it built nearly all the specialized parts and mechanisms used in its products.  Most recently, Moloney had led Bally into the vending machine business in 1956 with a well received hot and cold drink machine and established a new subsidiary, Bally Vending Corporation, to sell it.

Moloney’s death threw Bally into turmoil.  His entire estate, including Lion and its subsidiaries, was placed in a trust administered by the Chicago-based American National Bank and Trust Company.  Longtime Bally executive Joseph Flesch took over as president, but he relinquished control to Moloney’s sons, Ray Jr. and Donald.  By that time, the decline in the sale of bingo machines brought on by the 1957 Supreme Court decision banning payout pinball machines had significantly impact Bally’s bottom line, and the company was losing money.  American National therefore felt it was in the best interest of the estate to liquidate the firm to pay off debts and estate taxes.  Moloney’s sons argued that allowing Bally to develop and sell new slot machines would restore Lion to profitability, but the bank had no interest in funding an operation it assumed would have deep ties to organized crime.  The Moloneys bought themselves some time by selling Bally’s highly successful drink vending machine business to Seeburg for $3 million in 1961, but the next year American National decided it was time to dissolve the firm.  Bally ultimately survived, however, through the intervention of Bill O’Donnell.

Bill O’Donnell, the man who saved Bally

Born in 1922, William Thomas O’Donnell was educated at Loyola Academy and Sullivan High School, but was forced to drop out in 1939 at age seventeen to support his family by joining the Underground Construction Company, where his father had served as superintendent before dying in 1929 at the age of thirty-five, to help build the Chicago subway system.  After enlisting in the United States Marine Corps in 1941 and serving in the Pacific Theater during World War II, O’Donnell briefly served as a postal worker after being discharged in 1945 before a cousin who served as Ray Moloney’s bookmaker suggested he seek employment with Bally. O’Donnell joined the firm in 1946 to work in the purchasing department before Moloney named him assistant sales manager six months later. In 1951, Moloney promoted O’Donnell to sales manager, and upon Moloney’s death American National named him to Lion’s board of directors.  O’Donnell subsequently played an active role in trying to save Bally through a management buyout, but he could not find a single bank willing to finance a slot machine company due to fears of ties to organized crime.  He therefore turned to Bally distributors for support.

Runyon Sales, a successful New Jersey distributor fronted by Abe Green and Barnett Sugarman, proved amenable and brought in two other investors of its own, a Brooklyn pool table manufacturer named Irving Kaye and a well-connected former vending executive named Sam Klein.  A native of Cleveland, Ohio, Klein served in the Army in World War II and then entered the family business, a cafe.  In 1954, he purchased the Stern Vending Machine Company of Cincinnati, which he later sold in 1960 to a firm called Emprise Corporation for $1.5 million.  At that time Emprise owner Lou Jacobs asked Klein to find other companies for him to purchase, leading him to talk to Green about buying Runyon.  The deal never materialized, but Green remembered Klein’s connections when it came time to make the Bally deal.  Although hesitant at first, Klein ultimately agreed to come on board and convinced Jacobs to finance a portion of the purchase.  This allowed O’Donnell, Klein, Green, Kaye, and Sugarman to form K.O.S. Enterprises and buy certain assets of Lion Manufacturing and the Bally name on June 17, 1963, for $2.85 million.  K.O.S. subsequently changed its name to the Lion Manufacturing Corporation and named Bill O’Donnell president.  Klein, the largest shareholder of the new corporation, became executive vice president.  Subsequent to the purchase, O’Donnell turned his attention to launching the new slot machine Moloney’s sons had failed to complete.

A Revolution in Slot Machines

Money Honey, the first electromechanical slot machine

The slot market Bally hoped to rejuvinate entered the 1960s in crisis.  The passage of the Johnson Act coupled with a contemporaneous ban on the manufacture of slot machines by the state of Illinois had virtually destroyed the industry at the beginning of the 1950s, which could now only engage in limited production of machines for Nevada and a few scattered counties and gray markets in other states.  The leader remained Mills, which had transformed greatly since its penny arcade days.  Company founder Herbert Mills died in 1929, though by then he had already divested much of his authority to his sons, Fred, who served as general manager, and Herbert Jr., who ran production.  Fred succeeded his father as president and led the company into vending machines in 1935 in alliance with Coca-Cola, for which it produced one of the first automatic cooled bottle-dispensing soda machines.  The company subsequently established the Mills Automatic Merchandising Company in New York to sell gum dispensers and similar machines.  In 1943, Mills Novelty changed its name to Mills Industries, Inc. to reflect its more diverse range of activities, which now including vending machines, jukeboxes, slots, and refrigeration equipment.

Fred Mills died in 1944 and was succeeded by Herbert Jr. as president, who decided to separate slot machine sales from the rest of the company by establishing Bell-O-Matic Corporation in 1946.  Even with this split the company remained focused on slots until the passage of the Johnson Act, which necessitated an increased focus on vending machines.  The company generally struggled after the War, however, and filed for bankruptcy in 1948.  The company’s creditors appointed a man named A.E. Tregenza executive vice president of Mills Industries, who sold the jukebox division and pushed hard for expansion in vending, freezers, and ice cream machines.  Ultimately, he helped arrange a sale of the company in 1954 to a group of investors led by Richard Dooley.  The new investors were not interested in slot machines, so Herbert Jr. and his brother Ralph retained Bell-O-Matic, which had shifted its headquarters to Nevada in 1951.

Mills’ primary competition in slot machines continued to come from O.D. Jennings and its successor, Jennings & Company, established to take over the assets of the original firm after Ode Jennings died in 1953.  In 1957, Jennings became a subsidiary of the Hershey Manufacturing Company, and by the early 1960s Jennings slot machines represented 80% of Hershey’s total manufacturing output.  Mills and Jennings each held roughly 35%-40% of the slot machine market,  with most of the remainder going to Ace Manufacturing, the successor of a firm called the Pace Manufacturing Company.  Founder Ed Pace had started in slots in 1926 as a purveyor of used machines before buying out another company to start his own manufacturing the next year.  Pace Manufacturing released several popular models in the 1930s and continued operations until the passage of the Johnson Act in 1951, after which Pace retired.  Coin-op veteran Harold Baker took up the manufacturing of Pace slot machines at that point, and when he died two years later, Ace took over the operation.  In the early 1960s, Ace controlled about 15% of the market.

In 1963, Illinois repealed its slot machine manufacturing ban, and O’Donnell was ready to take Bally back into a market it had abandoned in 1949.  Because the Johnson Act had been passed so soon after the complete halt in slot machine production brought on by World War II, most machines in use at Reno and Las Vegas casinos still relied on decades old mechanical technology.  These machines were burdened by several limitations, most notably a payout cap of twenty coins, the most that could fit in a coin tube.  Larger payouts had to be awarded by an attendant who came over to verify the win, and this extended halt in play created a natural ending point after which the patron would often leave.  By incorporating a hopper controlled by an electrical circuit, Bally’s new machines could regulate delivery of several thousand coins in a variety of payout combinations, thereby allowing faster, more exciting play sessions.

The hopper that proved so crucial to Bally’s new slot machine came to the company in a roundabout way thanks to a prominent Vegas distributor named Mickey Wichinsky.  Starting as an operator in the Castskills in the 1940s, Wichinksy developed connections with both Runyon Sales and the mob-backed Las Vegas casino operations and moved to Las Vegas in 1956 to establish a distributor called Frontier Vending and take over as the Pit Boss of the Sands Casino, where he became the first person to install Bally machines in a Vegas casino.  In 1960, Wichinkky financed the development of a new roulette table produced by Jack Lavigna and Clarence “Doc” Kaufman for the Acme Novelty Company. In addition to providing funding, Wichinsky, who started designing his own games on the side in 1957,  also developed the first hopper mechanism for the machine.  The roulette proved unsuccessful, but Kaufman also served as Bally’s distributor in southern Nevada and passed the hopper innovation along to the company.  Bally built five prototype hopper machines by converting an old mechanical machine called High Hand and passed them along to Wichinsky, who had in the meantime bought out Kaufman’s business and now ran Bally’s southern Nevada distributor, the Bally Sales Company. The prototype proved poorly engineered, however, so Kaufman rebuilt it to create the Bally Model 742A.  At first unable to win approval from the Nevada Gaming Commission for the 742A, Bally turned to England, where a law passed in 1960 had legalized slot machines in pubs for the first time.  Cyril Shack of the Phonographic Equipment Company began importing the machines by the planeload, but felt that in order to garner mass market appeal, the 742A would need to have a proper name.  He suggested Money Honey.

By 1964, Bally was in full production on Money Honey, but many Nevada casino owners were hesitant to buy the new machines, largely due to quality concerns and the expense of replacing their entire stock of machines at once, so production remained limited for the first few years and sales were mostly made overseas.  Things changed in 1967 when a veteran Wurlitzer distributor named Si Redd established the Bally Distributing Company in Reno at O’Donnell’s behest with a mandate to sell Money Honey machines in northern Nevada.  Redd took to installing up to twenty slot machines at area casinos free of charge and sometimes even offered to reinstall their old machines for free if the owners were not satisfied with the Bally machines.  When operators saw their earnings per machine increase by as much as 400% with electromechanical slots, the logjam broke, and Bally took over the market.  In 1968, Bally produced 94% of all the slot machines sold in the state of Nevada.  Buoyed by this success, O’Donnell incorporated Lion as the Bally Manufacturing Corporation that year with the intent of taking the company public.  A long Securities & Exchange Commission investigation followed to insure the company was not a front for organized crime, after which Bally became the first publicly traded coin-operated manufacturer on March 13, 1969.

Innovation in Pinball

Duette (1955) from Gottlieb, the first two-player pinball

Through all the turmoil of the 1950s as companies closed, prominent executives died, gambling devices faced legislation, and target demographics changed, one company continued on as it always had.  David Gottlieb was known as a conservative businessman who rarely took risks and ran his affairs as if the entire coin-op industry could fall apart at any time.  He therefore refused to chase novelty markets and fads, focusing on the amusement pinball trade that had served him well since Baffle Ball in 1931.  While Ray Moloney at Bally expanded into the gambling business as fast as he could and eventually ceased building traditional pinball machines entirely in favor of bingo games, Gottlieb refused to release payout machines of any kind and publicly feuded with his counterpart at Bally, arguing that gambling machines only invited government interference.

Even as shuffle alleys and pool games dominated the first half of the 1950s, Gottlieb continued to focus its attention on pins.  While an individual machine in this period might sell only 1,000-2,000 units, Gottlieb maintained an aggressive release schedule of between ten and twenty tables a year to become the dominant pinball manufacturer in the industry.  Remarkably, nearly all of these tables were designed by a single man, Wayne Neyens.  Born in Iowa in 1918, Neyens was attending Crane Technical High School in Chicago in 1936 when a coin-op company called Western Equipment & Supply came to the school looking to hire a draftsman.  Neyens worked part time for Western until he graduated high school and then joined the company full time doing odd jobs in the shop and eventually becoming a line inspector.  In 1939, he left Western in a salary dispute and joined Gottlieb as a tester.  Neyens designed his first pinball game in 1949, and when flipper inventor Harry Mabs left the company in 1951 to work for Williams, Neyens took his place as Gottlieb’s principle designer.

Pinball experienced few innovations in the 1950s, but Neyens was responsible for most of them.  Perhaps the most significant was the advent of multiplayer pinball, in which several players competed with each other for a top score.  The key technological innovation that made multiplayer pins possible was the introduction of mechanical reels to tally the score in place of numbers lighting up on the backglass, which debuted in the Williams pin game Army-Navy in 1953.  Gottlieb introduced the first four-player pinball machine, Super Jumbo, in 1954, but the game was not particularly successful due to the mistaken perception that four players were required to play the game.  Neyens therefore went back to the drawing board and created the first two-player pinball game, Duette, the next year.  Duette proved far more successful, and by 1956 multiplayer pinball machines had eclipsed single player pinballs and pool tables in sales at Gottlieb.  Multiple players also justified a higher price per play, and along with bumper pool Gottlieb’s multiplayer machines led a transition from penny and nickel play to dime machines.  In 1960, Gottlieb introduced another innovation on its Flipper table, the add-a-ball mechanism, created to circumvent laws in certain jurisdictions like Texas were a free play was considered a prize that transformed an amusement pinball into a gambling machine.

Sam Stern (l) and Harry Williams

While industry leader Gottlieb proved a model of stability in the 1950s and 1960s, the number two pinball company, Williams, underwent several profound changes that began when company founder Harry Williams met a man named Sam Stern. Working in the clothing business in 1931, Stern decided on the advice of friends to break into the coin-op industry as a route operator in Philadelphia and became a major player after becoming a Rockola jukebox distributor in the city in 1939. Eager to move further up the chain, Stern walked into Williams’s office in 1947 and brazenly asked to buy 49% of Williams Manufacturing, and Williams, who far preferred designing to managing, agreed to sell. Stern became a vice president at Williams in January 1948 and held the post for the next eleven years before orchestrating a buy-out of Williams in 1959 by Consolidated Sun-Ray, a New York retail conglomerate that operated a variety of businesses from drug stores to discount houses.   Both owners were offered cash or stock in the deal. Williams opted for cash and left the company, while Stern took stock and replaced Williams as president of the renamed Williams Electronic Manufacturing Corporation.  The merger with Sun Ray did not work out, however, and Williams became independent again in 1961.

Under Stern, Williams could never dethrone Gottlieb from the top of the pinball industry, but it maintained the Williams legacy by being the main innovator of the game in the late 1950s and early 1960s. Leading these developments were Harry Mabs, the flipper inventor who joined the company from Gottlieb in 1951, and flipper refiner Steve Kordek, who stayed at Genco, which became a subsidiary of Chicago Dynamic Industries in 1952, until the company shut down in 1959 and then worked briefly at Bally before joining Williams in 1960.  In 1958, Mabs built a game called Gusher that featured the first “disappearing bumper,” a bumper that would lower into the playfield when hit.  In 1960, he designed a game called Magic Clock that featured the first moving target on a pinball playfield. Mabs retired soon after, and in 1962 Kordek designed another innovative table called Vagabond that featured the first drop target on a playfield, a special type of standup target that drops below the playfield when hit.  The next year, Kordek introduced another important innovation in Beat the Clock, multiball, the possibility of having more than one ball in play at the same time if the proper targets are hit.  In 1966, another designer named Norm Clark gave Williams one of the biggest hits of the decade, a 5,100-unit seller called A-Go-Go that featured another new playfield mechanic, a captive ball spinner that spun around and dropped the ball into a hole with a random point value when trapped by the device. These tables helped transform pinball into a game of structure and sequence as the primary objective of the game became hitting a group of targets in a specific order or targeting a specific part of the playfield at a specific time to gain added benefits and bonus points. Ultimately, Williams’ expertise in pinball design attracted the attention of another major coin-op firm with ambitions to expand, the Seeburg Corporation, which had recently come under new management.

In the early 1950s, Herbert Siegel, a journalism graduate working for a Manhattan TV firm, and Delbert Coleman, a University of Pennsylvania law student, combined their resources to buy a stake in a soft drink company that they then swapped to acquire a Cleveland chemical company whose earnings they were able to double in ten months. Next, they set their eyes on Fort Pitt, a Pittsburgh beer brewing company established in 1906. Once Pennsylvania’s top brewer, Fort Pitt had been severely hamstrung by a series of strikes in the early 1950s and had sustained losses of over $1.8 million by 1955. These losses could be offset through a merger with a profitable company, however, so Siegel and Coleman courted the brewer’s longtime president, Michael Berardino, and arranged a merger in April 1956 with two coat companies owned by the Siegel family, Windsor Overcoat and the Jacob Siegel Company. After concluding this deal, Siegel and Coleman marshaled the combined financial might of the new conglomerate to purchase Seeburg that December, which by then enjoyed average yearly sales of around $30 million and average yearly earnings of $2.6 million. With these acquisitions complete, the duo orchestrated a management coup in March 1957, removed Berardino from the company, and secured Siegel’s appointment as chairman of the board and Colemen’s appointment as president of Fort Pitt. The duo then sold off the brewery business that November and changed the name of the parent company to Seeburg Corporation in April 1958.

After securing their hold on Seeburg, Siegel and Coleman initiated an aggressive expansion plan intended to involve the company in nearly every coin-operated field. In 1958, the company purchased the cigarette vending machine business of Eastern Electric.   In 1961, it added Bally’s drink vending business.  Several more drink and cigarette vending machine purchases followed along with the Kinsman Organ Company, which together made Seeburg the largest manufacturer of coin-operated equipment in the United States. Seeberg’s efforts culminated in an expansion into the coin-operated amusement field in June 1964 through the purchase of Williams from Stern followed by the acquisition of United Manufacturing from founder Lyn Durant that September, which was absorbed into Williams. To run its amusement business, Seeburg kept on Stern as president of Williams after the purchase.

With the closing of Genco in 1959 followed by the purchase of Williams and United by Seeburg five years later, the fraternity of coin-op amusement manufactures dwindled to just five companies: Gottlieb, Williams, Bally, Chicago Coin, and Midway.  Gottlieb remained the leader in pinball, a title it would not relinquish until the mid 1970s, trailed by Williams, Bally — back in the amusement pin business after bingo games were banned in the early 1960s — and Chicago Coin.  In novelty, Williams continued to dominate pitch-and-bat baseball games and also took the lead in shuffle alleys and ball bowlers — which were often marketed under the United name — after Bally quit production at the beginning of the 1960s.  Chicago Coin and Midway, meanwhile, offered the most comprehensive lineups of novelty arcade pieces.  With so few manufacturers of equipment, however, stagnation quickly set in as new game designs became stale and predictable and companies often merely incorporating small cosmetic changes into existing concepts to differentiate them from the models released the year before.  Just as coin-operated amusements appeared ready to enter a steep decline, however, a savior appeared in the form of a new type of arcade machine from Japan.

Historical Interlude: The History of Coin-Op Part 2, From Slot Machines to Sportlands

Between 1895 and 1905, the penny arcade enjoyed a preeminent position in the entertainment world.  Marcus Loew, who would later establish the Loews theater chain and forge MGM, ran an arcade, so did Adolph Zukor, who established Paramount Pictures, and William Fox, who gave his name to 20th Century Fox.  The peep show dominated the arcade, and American Mutoscope dominated the peep show.  But William Dickson and Henry Casler were never the type to rest on their laurels.  In 1896, two years after completing the Mutoscope, Casler, at Dickson’s urging, developed the Biograph, a projector that allowed film to be displayed on a large screen rather than in a tiny wooden box.  The Biograph was not the first film projector — the project was implemented to counter the Edison-backed Vitascope and the Lumière brothers were already making their first films for display via the Cinematograph in France — but American Mutoscope, renamed American Mutoscope and Biograph in 1899, was far better funded than most of its competitors and took an early lead in film projection.  By 1908, three years after the first nickelodeon opened in Pittsburgh, D.W. Griffith was making short films for American Mutoscope and Biograph, and not long after that Mary Pickford and the Gish sisters were starring in them.  Men like Zukor and Fox abandoned the arcade for the promise of the new motion picture business, and even American Mutoscope chose to distance itself from its roots, shortening its name to American Biograph in 1909.  The penny arcade boom was over.

But coin-operated entertainment did not die.  Just as the peep show fell out of favor, new advances in engineering resulted in the first practical fully automatic payout gambling machines.  As popular as it was controversial, the advent of the “one-armed bandit” brought coin-op companies like Mills and Caille Brothers ever increasing profits and the industry an ever increasing stigma it would take decades to finally shed.  As slot machines became increasingly regulated and pushed to the fringes of lawful society by the early 1920s, however, coin-op companies old and new began injecting a degree of skill into their games of chance.  By the beginning of the 1930s, this trend culminated in three brothers developing a whole new arcade concept, the Sportland, which focused on games rather than novelty attractions or peep shows, signifying a paradigm shift within the industry.

NOTE:  And here is part two of my six-part overview of the first hundred years of the coin-operated amusement industry.  Principle sources this time around were Automatic Pleasures by Nic Costa, Arcade 1: Illustrated Historical Guide to Arcade Machines by Richard Bueschel and Steve Gronowski, Pinball 1: Illustrated Historical Guide to Pinball Machines by Richard Bueschel, the article “‘Sportlands’ Seen as Evolution of the Penny Arcade” in the April 1932 issue of Automatic Age, the article “The Fun Machines” in the July 4, 1977, issue of Sports Illustrated, and the article “Penny Arcade Philanthropist” in the October 16, 1948, edition of The New Yorker.

The Rise of the Slot Machine

A Sittman and Pitt five-reel poker machine, the precursor of the modern three-reel slot machine

Unlike the coin-operated amusement industry, which originated in Europe, the coin-operated gambling industry was a largely American phenomenon.  This is because games of chance already had a long history in Europe before the advent of coin-operated machines, and consequently so did anti-gambling laws.  In France, gaming for money had been prohibited by Louis XVI in 1781 by an edict that had survived the Revolution and the many governments that followed, while in England acts of Parliament passed in 1853 and 1854 severely limited the operation of automatic games of chance.  Gambling games were still developed, of course, but the drop case games and allwins of Europe (briefly covered in a later post) were of an entirely different character than the machines that took over the United States, where gambling laws were fairly lax in the late nineteenth century, and the design of coin-operated gambling games flourished.

The earliest coin-operated gambling games were counter top models referred to as “trade stimulators” that usually sat on the bar of a tavern or next to the cash register at a store and gave a patron the chance to wager some of his spare change for the chance to win a prize such as a cigar or a piece of candy.  The earliest known machine of this type was the Guessing Bank, developed by New Yorker Edward McLoughlin in 1876, in which inserting a coin would cause a dial to spin and stop on a random number.  The patron would guess the number the dial would land on before inserting his penny and win a prize if he was correct.  Like other coin-operated devices, however, the trade stimulator did not see wide distribution until the late 1880s.  A variety of trade stimulators were developed in Europe during this period, but the spinning dial machine, which entered general use after British inventor Anthony Harris designed a wall-mounted version in 1889, remained the most popular.  Before long, however, a new type of trade stimulator gave it a run for its money.

In 1890, Frank Smith of the Ideal Toy Company of Chicago introduced a new machine designed to automate the card game poker, which had first risen to popularity in the United States in the 1830s.  Smith’s machine consisted of five reels that each featured a series of playing cards painted on them.  When the patron inserted a coin, the reels would spin and each stop on a random card, which the patron hoped would result in a winning hand.  If the player won a prize, he could collect it from an attendant.  In 1893, the Brooklyn firm of Sittman and Pitt introduced its own card machine, which has been recognized as the first coin-operated gambling game to achieve national popularity in the United States.

By the middle of the 1890s, the trade stimulator had been joined by another type of coin-operated gambling device, the slot machine, which distinguished itself from other early gambling devices by featuring an automatic payout of a cash prize.  The first slot machine was developed in Syracuse, New York, by John Lighton in 1892.  In this machine, the coin inserted by the player would travel down one of two runways, either being deposited in the machine’s cash box or tripping a lever that caused two additional coins to be released and paid out to the player along with his original coin.  In 1893, an inventor in San Francisco named Gustav Schultze combined the slot machine with the spinning dial concept in a device he called the Automatic Check Machine, in which the player pulled a lever on the side of the machine that caused a dial to spin atop a colored wheel.  If the dial landed on a winning color, a bell would ring and two coins would be released to the player alongside a token with a random value between twenty-five cents and two dollars.  Spinning dial slot machines became very popular over the next two years, but they were ultimately superseded by a new machine invented by a man named Charles Fey.

Charles Fey, developer of the first popular three-reel slot machine

Born in Vohringen, Bavaria, in 1862, Fey clashed with his father, a strict school master and an officer in a conservative church, so he left home at the age of fifteen to seek his fortune.  After spending five years in London as an apprentice instrument maker at a shipyard, Fey saved enough money to immigrate to the United States.  Arriving initially in Hoboken, New Jersey, in 1882 and settling for a time in Wisconsin, Fey relocated to San Francisco in 1885 to serve as a model maker for California Electric Works.  In 1894, Fey left the company with a fellow employee named Theodore Holtz to establish Holtz and Fey Electric Works to go into direct competition with their former employer. At the time, San Francisco was home to a large number of saloons — a legacy of the gold rush in the 1850s — and was also at the heart of the poker craze that had swept the United States, so the city became a major venue for the five-reel card machines just coming into vogue.  Both Fey and Holtz became enamored with these new machines, but ultimately decided to part ways, with Holtz establishing his own company and Fey briefly going to work for slot machine pioneer Gustav Schultze before striking out on his own.  Working in the basement of his apartment building, Fey designed his first gambling machine, called the Horseshoe, in 1894, and a second machine called the 4-11-44 in 1895, a form of lottery machine in which patrons lined up sets of numbers to win prizes. When these machines proved popular, Fey established Charles Fey and Company in 1896 to focus on the slot machine business.

Fey’s major breakthrough was to combine the two principle gambling attractions of the time: the slot machine and the card machine.  Card machines were incredibly popular, but they could not automatically grant a reward, greatly decreasing their utility.  Early slot machines could provide a payout, but lacked the excitement of the card games.  Fey therefore decided to add an automatic payout mechanism to the five-reel poker machine, but the mechanical challenge proved too difficult.  Fey’s solution was to pare down the number of reels on his machine to three. Originally manufactured as the Card Bell sometime between 1898 and 1905, Fey quickly decided to replace the pictures of cards on the reels with images like stars and bells since the player was no longer attempting to complete a poker hand and changed the name to the Liberty Bell. The combination of spinning reels and automatic payout proved irresistible, and the Liberty Bell soon became a sensation in the San Francisco area.  The machine did not spread beyond the city, however, as Fey had no desire to mass produce and sell his invention, instead making deals with bar owners to install slots for a fifty percent take of the coin drop. This situation persisted until the disastrous 1906 San Francisco earthquake, during which Fey’s workshop burned to the ground.  This loss left a vacuum in the three-reel slot machine business that was quickly filled by the Mills Novelty Company.

As discussed previously, Mills released its first slot machine in 1897, a spinning dial machine called the Owl, one of the earliest models designed to stand on the floor rather than on a counter top.  Two years later, a New York manufacturer named Mathias Larkin created a similar machine called the Admiral that was the first slot machine to be advertised nationally and featured an image of Admiral George Dewey, extremely popular after his victories in the Spanish-American War, to help spur sales. Impressed with Larkin’s work, Herbert Mills hired him to open a San Francisco office and serve as his company’s promotional manager. It was no doubt through this branch office that Mills first became aware of Fey’s Liberty Bell.  What happened next between Fey and Mills differs based on who tells the tale.  Fey and his descendants claim that Larkin took one of Fey’s machines from a local tavern so that Mills could copy and steal the design.  The Mills family, on the other hand, states that Fey came to Chicago and offered to turn the design over to Mills in return for receiving the first fifty machines off the assembly line at no cost.  As Fey lost the ability to build his own machines in the earthquake and Mills already had a history of buying up the rights to products from other inventors, the Mills version feels more plausible.  Either way, the Mills Liberty Bell entered mass production in 1907.

The Mills Bell Machine, which brought the three-reel slot machine to prominence

With the Liberty Bell finally becoming available nationwide, the popularity of three-reel slot machines soared, completely displacing the earlier dial machines and leading the larger manufacturers in the coin-operated amusement business to concentrate almost exclusively on slots. Taking advantage of its head start over the competition, Mills built a commanding lead in the market that would last until the early 1960s. Caille Brothers also quickly embraced the “one-armed bandit” and competed closely with Mills until the end of World War I, when the Detroit company began to fall behind.  Mills’ closest competitor thereafter was a manufacturer named Ode Jennings. Born in Kentucky, Jennings entered the coin-op business by moving to Chicago in 1901 to become a salesmen of penny-arcade machines and first gained notoriety through managing the Mills arcade at the 1904 St. Louis World’s Fair. In 1907, he established the Industry Novelty Company in Chicago to deal in used slot machines, vending machines, and scales, which he would often modify with features of his own design. Industry began manufacturing its own slot machines in 1911 and changed its name to O.D. Jennings and Company in 1928. With Mills, Jennings, and more distant competitor Watling all based out of Chicago, the Windy City became the center of the coin-operated gambling and amusement industries by the late 1920s.

As slot machines continued to grow in popularity throughout the first decade of the twentieth century, a backlash began to develop against the machines, which were seen in many circles as nothing more than a way for shopkeepers and saloon owners to cheat honest patrons out of their money. As a result, San Francisco, the original center of the industry, banned slot machines that dispensed a cash payout in 1909, and the entire state of California followed suit two years later. This signaled the beginning of a series of widespread bans that soon left slot machines illegal in most of the country. The beginnings of Prohibition in 1920 further stigmatized the slot machine, as speakeasies that were engaged in illegal activities anyway often included the devices on their premises and the cash-only nature of the business quickly attracted organized crime. Manufacturers were also hit hard by the onset of Prohibition, as bars and saloons had been the primary venue for slot machines, and the closing of these establishments left a hole that other businesses could not entirely fill.  While the slot machine industry attempted to compensate for these setbacks by producing machines that awarded prizes of candy and gum instead of money, shops that operated slot machines faced the constant threat of confiscation and other legal action. With slot machines and trade stimulators under attack and pushed to the outer margins of the law by the mid-1920s, several entrepreneurs began emphasizing skill-based elements in their products so they could argue the machines were not purely games of chance.  This move ultimately helped revive the penny arcade.

Coin-Op Amusements Make a Comeback

An Exhibit Supply True Love Letter card vendor

The 1910s were a hard decade for the coin-operated amusement business.  With the rising popularity of the cinema and the far cheaper production costs of film projection versus peep shows, American Mutoscope and Biograph halted all production of both Mutoscope machines and films in 1906.  With the Mutoscope overthrown, arcades had to rely more on their novelty pieces like testers and shockers to draw clientele, but there were only so many ways to build a strength machine or a scale, so without the attraction of new peep shows, there was little reason to come to the penny arcade — unless you were looking for one of the racier films in a seedier location.  World War I and Prohibition killed off most of what remained of the business, the former curtailing the development of new machines and the latter closing the bars that had been the prime venue for testers even before they incorporated coin control.  The smaller companies in the arcade business could not survive the temporary halt of new machine design brought on by the war, and most of them went out of business.  While the larger companies survived, they also abandoned the dwindling arcade scene.  Rosenfield Manufacturing left the coin-op business entirely to create electrical appliances like vacuum cleaners, while Caille Brothers turned its entire focus to slot machines after Arthur Caille died in 1919, as Adolph Caille had never really liked the arcade business in the first place.  In 1929, Caille began building outboard motors alongside its coin-op production, and in 1937 Adolph Caille sold the firm to a rival motor manufacturer.  Only Mills continued to offer a full line of arcade equipment, but it also now focused on slot machines and did not create new arcade pieces, merely continuing to sell its existing line.  Just as everyone else was abandoning the arcade, however, one man decided the time was ripe to move in.

John Frank Meyer was born in Peoria, Illinois, in 1881.  Entering the printer’s trade, he established his own small printing shop in Chicago before joining a firm called the Exhibit Supply Company in 1907 as a partner.  Organized in 1901 as a postcard printer, Exhibit expanded its line rapidly after Meyer joined to become the largest supplier of printed cards for fortune tellers, horoscope machines, and all the other types of card vendors found in the penny arcade.  Meyer took full control of Exhibit in 1910 and moved the firm into building its own card vendors in 1914.  As the penny arcade approached the nadir of its decline, it actually became a somewhat fashionable spot for young couples to have a risque night out viewing lewd peep shows and purchasing printed love letters from card vendors as souvenirs.  By 1917, partially aided by soldiers flocking to city night life to take their girls out one last time before shipping off “over there,” Exhibit card vendors enjoyed enormous popularity and became a key component of the shrinking penny arcade business.  After World War I, Meyer decided to introduce a full line of arcade machines and hired Perc Smith, a former production manager for the Meade Bicycle Company and salesman for Mills Novelty with strong credentials in manufacturing, sales, and arcade operation, to sell them.  Together, Meyer and Smith built Exhibit Supply into the most important arcade equipment manufacturer of the 1920s.

While the marginalization of the penny arcade and the closing of the bars seriously wounded the industry, companies like Exhibit continued to hang on by transforming the nature of the business.  The increasing popularity of the automobile after the introduction of the Ford Model T in 1908 ultimately led the Federal Government to pass the Federal Aid Highway Act of 1921 to connect much if the United States by road.  Whereas in the past coin-op sales to smaller towns and rural areas had been factory direct and limited to a small number of saloons and hotels that would pick up their machines at the local train station, the rise of pickup truck delivery services opened up a wider array of small locations like grocery stores, restaurants, barbershops, and candy stores to coin-operated amusements.  By the mid-1920s, this led to a development of a new middleman in the coin-operated amusement business, the regional distributor, who would order machines from several manufacturers in large volume and sell them to operators that would maintain machines in multiple locations along a truck delivery route.  The operator would be responsible for keeping these machines in good repair and would split the coin drop with the owners of each location along the route to recoup the purchase price.  This manufacturer-distributor-operator model of selling coin-operated amusements would persist for decades.

Just as the coin-operated amusement industry was extending its reach into new areas through regional distribution, the increased regulation of the slot machine and trade stimulator lured a variety of new players to the market that were eager to keep the coin-operated gambling industry alive through injecting a degree of skill into their games of chance.  One of the first manifestations of this trend was the counter top gun game, in which the player would generally insert a coin into a slot that served as a bullet that the player would attempt to shoot into a scoring hole at the back of a glass-covered playfield in order to win a prize. In the early days of the industry, this would be a cash prize, but as gambling devices came under greater scrutiny, this was usually changed to candy in an attempt to avoid confiscation. While this type of trade stimulator dates back to a model created by Englishmen David Johnston in 1889 and achieved popularity in the 1890s, it did not become an arcade mainstay until a man named Walter Tratsch introduced his version to the industry.

Target Skill by A.B.T. Manufacturing, one of the first popular skill-based coin-operated amusements of the 1920s

Tratsch’s association with the coin-op industry began in 1902 when he joined with Frank Mills, a brother of the founder of the Mills Novelty Company and the man in charge of its East Coast operations, to run a penny arcade in Hoboken, New Jersey. Like slot machine manufacturer Ode Jennings, Tratsch operated arcade machines at the St. Louis World’s Fair in 1904, and he also partnered with Mills to run Owl and Admiral slot machines in the years before his company began mass-producing the Liberty Bell. After operating machines in Panama and Argentina starting in 1908, Tratsch came to Chicago in 1910 to open his first plant, which specialized in machine repair and parts fabrication for the coin-op industry. A trip out West to partner with Charles Fey followed in 1913 before he returned East in 1915 to partner with an acquaintance first met when they were both running coin-op machines at the St. Louis World’s Fair named Jack Bechtol, with whom he established the Diamond Confection Company and the Southern Confection Company in South Carolina to operate coin-op routes in the South. In 1919 the duo established a new company in Memphis that morphed into the A.B.T. Manufacturing Company when another long-time friend of Tratsch named Gus Adler invested in 1921. The company was named by combining the initials of the three owners, though Adler sold out his interest to a Chicago financier named Bill Gray two years later.  This company perhaps made its biggest mark on the industry through the introduction of an early coin chute, which required a coin to travel down a ramp before activating a machine and therefore made slugging much more difficult.

In 1925, A.B.T. relocated to Chicago and debuted one of the most important coin-operated machines of the 1920s, a countertop pistol game called Target Skill. Like earlier gun trade stimulators, Target Skill featured a glass-protected target area housed within a wooden cabinet, but unlike these earlier machines, the game provided five small steel balls as ammunition for the cost of a penny. The objective was to shoot these balls into five target holes of decreasing size, with each direct hit causing a flag to drop over the target. Unlike slot machines, there was no payout mechanism attached to the machine, making it a pure game of skill free of the legal challenges and confiscation hassles plauging most countertop devices. An instant success, Target Skill games were soon being produced at a rate of 2,000 a month as sales reached 40,000 units within a decade. Once the popularity of the game was well established, A.B.T began releasing variants that featured different playfield configurations and/or more prominent payout elements. These included the popular Big Game Hunter, in which a successful hit on one of the three targets would cause a slot machine reel to spin and lining up the proper targets would allow the player to obtain prizes such as a small cash payout or a pack of cigarettes from the operator, and the Challenger, which provided ten shots for nine scoring holes. A.B.T. continued to sell variations on Target Skill until the early 1960s and manufactured over 300,000 of them during that time. As one of the earliest coin-operated products to gain widespread popularity by focusing primarily on player hand/eye coordination and skill rather than on strength/endurance testing, vending, or random chance, Target Skill represented one of the first attempts to move coin-operated products from novelties and gambling concepts to actual games, paving the way for a major paradigm shift in an arcade industry that had remained stagnant for nearly two decades.

The Erie Digger, which launched the first crane game boom

A second concept particularly important to reviving the arcade was the coin-operated digger, or crane, machine, which like the new target shooting games combined elements of both skill and chance.  Sources differ on when exactly the first digger machines entered the marketplace, but most evidence points to the first models appearing in 1924. In that year, Norwat Amusement Devices introduced the Steam Shovel, while the Erie Manufacturing Company began selling its Erie Digger, which dominated the market into the early 1930s. By 1926, digging machines had become standard fare at boardwalks and amusement parks, but were particularly attractive for traveling carnivals due to their compact size and relative simplicity. In fact, it was a carnival concessions operator named William Bartlett who introduced the next important advance in crane games in 1926 with his popular Miami Digger, which allowed the patron to move the crane all around the inside of the box rather than just up and down as in earlier models.   Unlike Erie, Bartlett did not mass produce and sell his machines, but instead dispatched licensed agents to travelling carnivals around the United States and Canada, who would operate banks of 12-17 units on his behalf.  By the time Bartlett died in 1948, over forty operators were supplying cranes to all the major carnivals in North America.  While crane machines only vended candy at first, it did not take long for operators to offer silver dollars, paper currency, and bundles of coins wrapped in cellophane as prizes instead.

With the success of Target Skill and the carnival diggers, an array of new coin-operated games appeared in the late 1920s.  Exhibit Supply remained in the forefront of the market by readily embracing new machine concepts.  These included a popular crane game called the Iron Claw that debuted in 1927 and a target shooting game called Automatic Pistol Range launched in 1929 in which one or two players shot at targets mounted on a motorized carriage that rolled across a playfield housed in a large wooden cabinet.  Even Mills released a new punching bag strength tester in 1926.  Perhaps the most surprising return of the decade, however, was the Mutoscope, brought back by a businessman named William Rabkin.

William Rabkin, the founder of International Mutoscope

Born in 1894 in Babruysk, then part of Russia now part of Belarus, Welvel Rabkin — clerks at Ellis Island made him a William — entered a trade school at the age of twelve and spent three years learning how to be a machinist.  Rabkin’s father ran a modestly successful wholesale farm produce business until a warehouse fire bankrupted him, and he immigrated to the United States to work as a garment presser in New York City.  After becoming established there, he sent for the rest of his family, who joined him in 1909.  After stints as a plumbers apprentice and electrician’s helper, Rabkin finally found work in a machinist shop.  Several years later, he and a partner established their own shop.  After a falling out, however, Rabkin sold his interest in the shop and looked for another business involving machines.  This quest led him to American Biograph and the Mutoscope in 1920.

Once a leader in the film industry, Biograph fell on hard times in the 1910s.  In 1908, the company joined with Edison to form a trust called the Motion Picture Patents Company that dominated film distribution and limited production to a small number of allied studios, but the Federal Government broke up the firm in 1915.  In the meantime, Biograph had declined to enter the new feature film business due to the expense involved, causing Griffith to leave with most of the company’s stars.  Now that feature films were taking off, Biograph lagged the competition and could no longer rely on its monopoly to stay relevant.  The company released its last short film in 1916 and thereafter relied on reissues of its old films to barely stay afloat.  For this reason, the company was more than happy to sell Rabkin its entire stock of Mutoscope machines and films.

American Mutoscope had never sold its peep shows, instead licensing the machines and the films to play in them to penny arcades.  Rabkin decided that in order to turn a profit, he would have to sell his wares instead, but there was little interest among arcade operators due to a lack of new content.  Rabkin therefore commenced production of new short films in 1924, creating roughly five hundred reels in a variety of genres before shutting down production again in 1933.  Sales remained sluggish, however, until 1926, when the Mutoscope suddenly became fashionable again in Britain.  As sales took off overseas, Rabkin’s business grew rapidly, and he was able to combine his experience as a machinist with a new influx of capital to expand his arcade offerings beyond the peep show business.

The first original machine International Mutoscope created was the Shootoscope, a countertop target shooting trade stimulator released in 1926.  Like other games in the genre, play consisted of inserting a penny into a coin slot, which the player then fired at a target housed in a glass-covered wooden case.  If the player’s coin hit the whole in the center of the target, it would be returned to the player.  Next, Rabkin developed his take on the classic fortune telling machine — marketed as Grandmother’s Predictions — which debuted in 1928.  Both machines remained popular for years, but Rabkin experienced his greatest success through the newly emerging crane games.

During his lifetime, William Rabkin claimed to have invented the coin-operated digger after taking inspiration from watching a steam shovel dig out the foundation of a building while he was still working as a young machinist shortly after coming to the United States.  In truth, by the time Rabkin developed his Electric Travelling Crane in 1928, diggers had already been a popular attraction for several years, and he likely just adapted machines that he had already seen at carnivals and arcades.  Indeed, the Exhibit Supply Company thought Rabkin’s crane was so similar to its own Iron Claw, that it sued International Mutoscope for patent infringement.  Regardless of the source, Rabkin continued to improve his device over the next several years, and by 1933 the Travelling Crane had played a crucial role in igniting a digger boom that swept across the United States and Europe.  Before long, crane games housed in elaborate art deco cabinets could be found not only in penny arcades and carnivals, but also in department stores and hotel lobbies.  There were even so-called “craneland” arcades that housed nothing but digger machines.  By 1936, Rabkin had sold over 25,000 diggers, a significant number for a large arcade piece of the era.

While cranes, gun games, and card vendors began enjoying increasing popularity in the mid 1920s, the venues for these games remained relatively limited at first due to the continued sluggishness of the penny arcade business.  Arcades were still associated primarily with peep shows and novelties in this time period, and the appeal of these machines had waned years before.  Even with International Mutoscope now releasing improved viewers and new reels, interest in the peep show remained relatively muted in the United States.  A new paradigm in arcade entertainment was desperately needed, and it was finally provided by the Chester-Pollard Amusement Company.

The Chester-Pollard Play Football game, which brought competitive sports games to prominence in the arcade

The three Chester brothers — Pollard was their mother’s maiden name — entered the amusement industry in the early 1920s with a fortune telling machine.  Frank Chester, an electrical engineer, was the visionary behind the company, while Charles was an expert in mechanical technology, and Ernest was a consummate businessman.  In 1926, a British manufacturer named Freddy Bolland called on Chester-Pollard in New York to see if the brothers might be interested in the North American manufacturing rights to a manikin football game for which he owned the patents.  In this game, housed in a large wooden cabinet, two players would control the sides of a football match by pressing a lever to cause all the players to kick their legs at once.  For a nickel, the players would get a single ball and would have to time their kicks to score a goal on their opponent.  Score could be kept using a set of beads strung along the top of the cabinet, but every time a goal was scored, a new nickel would have to be inserted to keep playing.  Chester-Pollard agreed to take on the product, built 100 units, and tested them at select locations over the course of a year.  Proving itself a huge moneymaker, it was released generally in 1927.  Next came a mannikin golf game, which despite a relatively steep price of $150 for the penny model and $175 for the nickel model sold over 7,000 units.  In 1929, a horse racing game called Play the Derby debuted, in which two players turned cranks to drive horses around a track, and became yet another hit.  Chester-Pollard games were soon appearing in thousands of hotels, clubs, and railroad depots and could even be found on steamship lines.

With their competitive sports games doing so well, the Chester Brothers decided to expand into sports tables that did not incorporate coin control.  Baseball, table tennis, hockey, and bagatelle tables were tested in exclusive locations such as the Lido and Westchester-Biltmore Country Clubs, where they proved a tremendous success.  Based on these results, the Chesters believed they could pioneer a new arcade concept based around table games and exercise machines with and without coin control.  They named this new concept the Sportland.

In 1930, Chester-Pollard began testing the Sportland concept in existing arcades such as Playland Park in Rye, New York, owned by William Rabkin of International Mutoscope.  When these locations proved successful, they opened a purpose-designed Sportland in an outlying district of Brooklyn.  In its standard configuration, the Sportland featured a small array of coin-operated machines such as gun games or diggers in the front of the establishment and a large table game area in the rear blocked off by a fence.  For a quarter, a patron could spend thirty minutes playing all the table sports games they wanted.  The old penny arcade had failed when the public grew tired of peep shows because they had to be situated in a major thoroughfare to attract volume patronage, but owners could no longer afford the correspondingly high rents.  Sportlands, on the other hand, quickly attracted patrons whether they were located on a major street or not, and by the summer of 1931 they were a sensation throughout the New York area.

The onset of the Great Depression in 1929 cemented the arcade revival.  With worsening economic conditions severely restricting the amount of money most Americans could afford to spend on leisure in the early 1930s, arcade machines that could be played for just a nickel or even a penny became one of the few affordable activities in the country, causing revenues from coin-operated amusements to skyrocket. In 1930, over 250 companies manufactured 250,000 units of over 400 different games, and by 1934 these manufacturers were taking in more than $10 million annually. Meanwhile, Chester-Pollard had established fifty-two Sportland arcades in the New York City area alone by 1933, and they became a model for entrepreneurs all over the nation.   Consequently, the arcade completed its transition from a novelty attraction to a venue for games of skill, taking on the basic form it would maintain for the next sixty years.  Before long, many arcades were taking in over $800 worth of pennies and nickels a week, while prime locations could pull in as much as $1,200 a week despite an ever-worsening economy.  Gun games, competitive sports games, and diggers all played their part in this renaissance, but the most important contributor by far was a relatively new amusement called pinball.