The RNG
Nowadays slot machines are computerized. The odds are programmed. The reels and lever are present for historical and entertainment reasons only. The positions of the reels depend on a Random Number Generator. There is a Random Number Generator in the machine's software.
Random numbers are constantly generated by the RNG at an extremely high rate. As soon as the Play button is pressed, the most recent random number is used to determine the result. This means that the result varies depending on exactly when the game is played. The result would be different a fraction of a second earlier or later.
The RNG was noticed to generate not exactly random numbers. Most RNGs will repeat their number sequence. The cause of it is in poor programming. Pseudo RNGs with very long periods canbe built relatively easily. A single period can't be completed by any computer in the expected lifetime of the universe. It was Ronald Dale Harris, a former slot machine programmer, who knew the pseudo RNG code and seed values. It was he who discovered equations for specific gambling games like Keno. They allowed to predict that the next set of selected numbers would be based on the previous games played. But it is impossible for most machines, because numbers are picked by the RNG even when no one plays. So the player cannot tell where in the sequence they are.

Payout Percentage
Winnings 82–98 per cent of the money that is wagered by players are typically paid out by slot machines. The term theoretical payout percentage is used to denote it. The minimum theoretical payout percentage is controlled by jurisdictions. Law or regulation are used to establish it. A certain winning pattern is determined by every casino individually. The amounts they pay and the frequencies of these pay-outs are reflected in it. The main criterion for selecting the winning patterns on slot machines is that they should yield a certain fraction of the money played to the house. As for the rest of the money it goes to the players.
At the factory when the software is written a slot machine's theoretical payout percentage is set. To change the payout percentage after a slot machine has been placed on the gaming floor a physical swap of the software is required. As it is a time-consuming process it is done infrequently. There is sometimes a tamper-evident seal on the EPROM. It can only be changed in the presence of Gaming Control Board officials. Other jurisdictions constantly ensure that slot machines contain only approved software.
The Nevada Gaming Commission is working now with Las Vegas casinos on technology that would allow the casino's slot manager to change the game, the odds, and the payouts remotely. The change cannot be done instantaneously, but only after the selected machine has been idle for at least four minutes. The machine must be locked to new players for four minutes and display an on-screen message informing potential players that a change is being made after the change is made.

Linked Machines
Linking the machines in a special way is made to offer a particularly large prize, or jackpot. A small amount is contributed by each machine in the group to this progressive jackpot which is given to a player who gets a specific combination of symbols. A single slot machine's jackpot is considerably less than the progressive jackpot.
Sometimes multiple machines form multiple casinos. In these cases the manufacturer owning these machines is responsible for paying the jackpot.

Near-miss
The reel display of modern slot machines is controlled by computer software. It is possible to make the slot machine frequently display combinations that are close to winning combinations.
This practice is called near-miss programming.
There is a related phenomenon that is also sometimes called near-miss. The chance of a winning combination appearing on a pay line is controlled by the winning percentages programmed into the slot machine. The combinations above and below the payline are all roughly equally randomly distributed. There are roughly equally randomly distributed combinations above and below the pay line. This phenomenon only occurs where abbreviated physical reels are used to display a win pattern based upon the RNG. The symbols that appear around the winning line in video slots are an accurate depiction of how the reels were mathematically modeled.
The issue of a near-miss above or below the pay line was also investigated by the Nevada Gaming Commission. So long as the near-miss above or below the pay line was not specially programmed it was recognized legal. In other words, any other combination must be just as likely to occur as the near-miss. It is impossible to program the machine to show winning combinations more frequently than other combinations above or below the pay line.
Australia also forbids to use near-miss programming, where a near miss is inaccurately displayed. Manufacturer's practices are audited by regulators with the help of stop motion cameras.

Slot Machines Fraud
Mechanical slot machines and their coin acceptors were sometimes susceptible to cheating devices and other scams.
Coin acceptors have become obsolete in favor of bill acceptors and modern slot machines are controlled by EPROM computer chips. Different advanced anti-cheating and anti-counterfeiting measures have been taken to make it difficult to defraud these machines. Recent attempts at defrauding slot machines involve manipulating the EPROM, such as by directing microwaves toward it to disrupt its proper functioning.

Here is the list of the most amusing myths concerning slots.
You can spot a winning slot machine.
The only way you'll spot a winning slot machine is when the bells are ringing and the money is dropping. RNG is the main element of every slot machine and one never knows what combination it will form.
Casinos place loose slots near the cashier, aisle ways, etc.
In reality it is not to casino’s advantage to place loose slots at one and the same place, because in this case gamblers would play only these slots. The slots are mixed and nobody can say for sure whether this slot is a loose one or not.
Count the number of symbols on the reels to determine your odds.
It is a rude mistake. RNG decides when the machine will stop and there are thousands of combination available on a 3 reel slot machine.
Casinos can tighten or loosen slot machines from the back office.
It is not as simple as that. The casino can’t just change the chip of the slot machine. It is illegal and it has to be permitted by the commission.
A slot machine that has not been paying is due to hit.
Absolutely false. The RNG assures this. You have an equal chance of winning on a losing machine as you do on a machine that just paid out the jackpot.
Pulling the slot machine handle produces more wins than pressing the spin button and visa versa.
Again false. It makes no difference, as the computer only uses these as mechanisms to start the game. Only the computer determines a win or a loss and it has already determined if you are a winner or loser even before the first reel stops spinning.
Playing with hot coins improves your chances.
Once again, the computer determines a win or loss and the temperature of the machine or moneyirrelevant. Although it's funny that people still burn their fingers with lighters believing this works.
Casinos set slot machines to payback more on the weekends.
Wrong again. Your odds of winning are the same no matter if it's 4:00pm Monday, 8:00pm Saturday or 3:00am Wednesday. Casinos can not and do not do this.

Slot machines have a vivid and diverse history. Throughout the years, designs and implementation of slot machines went from mechanical to electronic, and from electronic to digital, then from digital to purely software, but the principles are still the same: the slot machine has reels which spin and, if the pre-defined winning combination plays out, you win. Basically, you just put in the coins and wait to find out whether you won or not.
In fact all slot machines are the same. They have different odds (and of course payouts), different payoffs, different symbols and different exterior arrangement, but there's little difference under the hood. There are so many variatisn of slot machines that everybody can find something to his liking.
Two most distinct types of slot machines are single line and multiline slots. In single line slots, the machine has just one line of reels, usually with 4 or 5 wheels, while in multiline there are a number of reel lines. Multi line slots are more difficult to understand because you win according to the winning combinations on the paylines, which can be formed in many ways. Sometimes you don't win anything at all, and sometimes multiple combinations award you with relatively big winning money. Paylines can be different. They can be vertical, diagonal, zigzags and what not.
Another interesting variation of the slot machine is a jackpot. If the slot machine has a jackpot it means that a certain amount of each additional bet is added to the jackpot. So the jackpot becomes bigger and bigger with every bet. Jackpots can reach several hundreds of thousands dollars. There is only one winning combination that can bring the gambler the jackpot.
Since slot machines appeared they have been played with coins. The new invention is a slot machine online, which doesn’t differ greatly from regular slot machines. Like regular slots they have betting limits, which can be even lower than in real casinos. Unlike the table games, slot machines don't involve any decision on the player's part and so aren't threatened by game management systems because of their fixed odds; the bet limits are more of a traditional thing than anything else.
Software slot machines (as well as the digital ones) are equipped with a random number generator which is what actually plays the game. This methodic allows very fair and precise balancing without actually hurting neither the players' interests nor the casino revenue.

You can be sure that slot machines are designed to be honest. What you can really doubt is the honesty of some manufactures.
The very first slot machines worked according to the following principle: the wheels spun and then each of them stopped randomly. Modern slot machines differ form the old ones greatly. These machines contain computer chips that are programmed to select numbers randomly. The numbers the computer selects correspond to the symbols that appear on the slot machine’s screen. There is a computer code. It generates the random numbers and determines whether the slot machine is loose or tight. The gaming inspector will examine the machine to make sure it will not deceive the player. There is a legal rate according to which the machine has to pay out. Of course it can pay lower, which happen very seldom.
It is next to impossible to say whether the chip is programmed not in a right way because the machine is not supposed to pay out with every spin. The machines have to be examined before people begin to play them. Of course it is very difficult to examine every single machine, that’s why inspectors examine only brands. If inspectors approve the brand, they can produce machines, and change them. But these changes must cover legal requirements. Some dishonest manufactures use the right to produce machines, but use a different chip, which is programmed to pay less or not so often.
For example, the Nevada Gaming Commission caught American Coin using chips that did not allow poker royal flushes. Or a chip that shows near misses of a jackpot. One the one hand the machine would never have a jackpot and the player would keep on playing. Don’t keep silent if you come across such slot machine. In the case if the complaint the inspectors will visir the casino and check whether the machines have a legal chip. Manufacturers that cheat are fined or they can lose their license.

Meet the man who beat the slots.
It is not a secret that it is next to impossible to cheat a slot machine. But do you know that Tommy Glenn Carmichael managed to improve the payout of the machine to his benefit.
Carmichael, now 53, had a long history of inventing devices to cheat slot machines. His first device was a kind of a top-button joint. By the way, for this device he was sent to prison. Then he was released, but continued to work at inventing devices for cheating a slot. The principle of his next invention was following: he inserted a guitar wire in the slot machine and it made the coins release from the hopper.
Later, as slot machines became computer based, he had to invent a new tool. Tommy found a manufacture who showed him the inside of a slot machine. From that experience, he learned what he needed to know to beat it. His new inventions was a light want that blinded the sensor of the slot machine and as a result got winnings. Carmichael marketed these wands to other slot cheats, making as much as ,000 a day. With all this money he bought expensive cars, houses and what not.
But as known good things can’t last forever. While using his devise Tommy was caught by the police. He was fined, but soon came back to the same business. By this time, authorities had tapped his phone and recorded conversations with other cheats who used his device. Three years’ probation and expropriation was the punishment. He has been banned from entering any casino.