Ballyhoo!
Bally Technologies celebrates its 75th anniversary—looks to the future
by Frank Legato
For any slot player, the logo is like an old friend. We can spot the red, cursive letters from across the room: “Bally.”
In fact, for possibly the majority of Americans alive today, it is an iconic logo that will conjure memories not only of slots, but of the tools of leisure in general—from pinball machines to arcade games. A slot machine, though, was one of the first products of the company founded as Bally Manufacturing, Inc. in Chicago in 1932. From the 1960s on, it would be the company’s legacy.
This year, Bally turns 75, and this month, the legendary slot-maker begins a birthday celebration with a new slogan: “Bally On Fire.”
“Our products are doing really well in the marketplace on all fronts,” says Richard Haddrill, the eighth and current CEO of the company that evolved from Bally Manufacturing to Bally Entertainment to Bally Gaming to Bally Technologies. “We’re getting 50 percent more market share than we used to get, and that’s growing.”
Thanks to the “Alpha Elite” operating system that now drives Bally reel-spinners and video slots alike, Bally’s slot games have never been more entertaining. Players are flocking to new Bally video slots like “Hot Shots,” the multiple progressive that features secondary games on miniature Bally slots to win the progressive prizes.
One of the most popular new game styles is “CineVision,” the wide-screen, upright video format that simulates the experience of watching a wide-screen motion picture in the space of a slot machine. Amid the early anniversary celebrations will be the reintroduction of an old favorite now placed in that format, as “Game Maker,” the multi-game unit that was one of the products that saved the manufacturer from extinction in the early 1990s, is reintroduced in the sharp Alpha Elite format.
The return of Game Maker is symbolic of the return of Bally to prominence after a recent rough patch. It was not the first bump in the long road leading from 1932 to today. The company that is now Bally Technologies, Inc. is the newest incarnation of a company that went from the pinnacle of the amusement game business to production of vending machines; from production of war materials to the ownership of arcades, health clubs, fitness equipment and casinos; and from the top to the bottom to the middle and toward the top again in a competitive slot machine market.
Parallel to this ride has been a relatively smooth trip at the top of the system market for the company which pioneered the online accounting and player tracking systems that allow you to sit at a machine today and earn comps.
Slots and systems will take the script logo into the next 75 years. “We really do want to use this anniversary as an opportunity to re-brand Bally and really show off our great technology,” says Haddrill.
Storied History
It was not the casino, or the slot machine, that spawned the Chicago company from which today’s Bally Technologies descended. It was, rather, the need of Americans to escape from their problems.
As unemployment and despair reigned in a deepening economic crisis in 1931, inventors like Ray Moloney were in the business of providing relief in the form of cheap diversions—penny and nickel amusement games for arcades. Moloney, who was the head of a company called Lion Manufacturing Corporation, created a pinball machine that allowed you to play 10 balls for a nickel—a good dose of entertainment for a minima price. He named it after a local Irish immigrant magazine, “Ballyhoo.”
The game was a hit with customers and highly profitable for arcade owners. It was so successful, in fact, that Moloney decided to create a wholly-owned subsidiary for Lion Manufacturing, devoted to amusement games. On January 10, 1932, he incorporated the new subsidiary as Bally Manufacturing, Inc.
Through the mid 1930s, Bally Manufacturing would score hits with several more arcade machines, but in 1936, two creations would forever change the company’s course.
They were two games designed for Nevada’s nascent casino business. The first was an automatic dice machine called “Reliance,” and the second was the first in the company’s history of applying an innovative twist to the slot machine. Called the “Bally Baby,” it was a countertop slot machine that was five by seven and a half inches and weighed only five pounds. It would be Bally’s first hit slot machine.
Moloney, seeing the immediate success of the Bally Baby, decided to make slot machines a permanent part of the Bally product line, and began applying his genius to the business of the gambling device. He would score another big hit in 1938 with the “Bally Double Bell,” which actually was two slot machines in one—three reels in the middle, coin slots on each side, and twin jackpots of nickels visible in glass chambers.
During this period, Moloney also diversified his manufacturing operation. In addition to amusement and gaming machines, Bally was a leading manufacturer of vending machines—Bally “Beverage Venders” would dispense Coca-Cola and other beverages in locations across the country.
The last slot machine success before the Second World War was the “Club Bell,” a three-reel console slot machine. The Club Bell was an early incarnation of things to come—it was the first “three-coin multiplier,” multiplying the jackpot amounts according to the number of coins wagered.
Upon America’s entry into the war, Moloney entirely converted Bally’s Chicago manufacturing plant to the production of war materials, from tank turrets and bomb sights to detonator fuses and gunnery training equipment.
Postwar Leisure Boom
Bally picked up where it left off after the war with more innovation in the creation of slots—the 1947 Triple Bell console slot contained the first electro-mechanical reel mechanism and electrical lights, technology that would revolutionize the casino slot business 16 years later.
The federal Johnson Act, signed into law in January of 1951, made it illegal to ship gambling devices across state lines except to those states where gambling was legal. This ended the lucrative business in console slots for private clubs. However, by this time, Bally was soaring atop the amusement game business. Its pinball machines were already legendary with postwar baby-boom youth—who loved a Bally invention that was revolutionizing pinball, and would soon be licensed to other pinball manufacturers: the “Flipper.”
Company founder Moloney died in 1958, and his sons, Ray Jr. and Donald, took over a company that was in the middle of its first serious business slump. The vending machine business was sold in 1961. Bally, its console slot business killed by the Johnson Act, had yet to score a success with a casino slot machine.
Enter William T. O’Donnell, a friend and associate of Ray Moloney who was, in 1963, head of sales at Bally. O’Donnell gathered six financiers and, with their help, purchased the assets of Lion Manufacturing Corporation and its Bally subsidiary, and assumed the position of president. He would usher in a new era for Bally—the era when it would become king of the slot machine.
The Money Honey
With O’Donnell in charge and the financing in place, Bally was set to complete work on the game that would forever change the slot floor—Money Honey.
Dom Tiberio, a Bally senior mathematician and 43-year employee who was hired shortly after O’Donnell took over as president.
Tiberio, who had earned his mechanical engineering degree only a year earlier, was hired as a junior engineer, and was assigned to complete the outer castings for the current project at the time, which was the brainchild of the two geniuses at the top of the engineering department—engineering head Herman Seiden and his colleague, Tom Mick.
The project was the industry’s first electro-mechanical slot machine for casinos, which would come to be known as the “Money Honey” because of the blonde beauty pictured atop the earliest versions.
Introduced to Las Vegas casinos in November of 1963, Money Honey took the electro-mechanical reel mechanism which Bally invented for the private club console slots in the late 1940s and placed it into a casino slot machine. It was the first time electricity was used in a casino slot, and Seiden and Mick used it to maximum advantage: There was back-lighting behind the reels. There was light behind the Bally logo. The machine came alive amid all the plain, steel hulks on the casino floors of Las Vegas.
Electricity allowed for other innovations as well: The reel mechanism driven and stopped by electrical servos was much faster than mechanical reels driven by gravity alone. The Money Honey was also able to pay out on more combinations than any machine previously made.
Finally, perhaps the most important innovation on Money Honey was the first payout hopper. Instead of coin tubes that limited payouts to perhaps $30 worth of dimes before a hand-pay would be required, Money Honey had what Bally called the “Bottomless Payout Reserve,” with a capacity of 3,000 dimes, with a motorized mechanism that dropped six dimes per second.
Money Honey revolutionized the slot floor, and set the tone for the way a reel-spinning slot machine would operate for two decades, and the way reel-spinners look and feel to this day.
Later versions of Model 742A ushered in a host of new innovations that we take for granted today: Multi-coin play. Multiple paylines. Wild symbols. Payouts on scattered symbols.
Within months of the introduction of Money Honey, Las Vegas casinos were hooked on Bally slot machines. By 1968, Bally had moved from the brink of extinction to command an astonishing 94 percent of the slot market in Nevada casinos. That year, the company became the first gaming company to go public, incorporating as Bally Manufacturing Corporation with shares traded over-the-counter.
A parade of further slot innovations would follow throughout the 1970s, including the introduction of the dollar hopper and the first dollar slot carousels in Northern Nevada. In 1975, Bally became the first gaming company to join the New York Stock Exchange. More innovation and diversification followed. In 1976, the company would introduce the Slot Data System, the first computer system to link slot machines to an online network that would record wagering information for accounting purposes. SDS would plant the seeds for player tracking and the first slot clubs.
The late 1970s would see Bally engineers working on the next generation of slot machine technology, the computerization of slot machines, which would lead to a breakthrough in the 1980s that would again change the nature of the slot machine.
The 1970s also would also see seeds planted for wrenching future changes at Bally. Late in the decade, a prominent Bally distributor named Si Redd invented the first video slot machines and video poker machines, which he would take to a new company that would become International Game Technology. The decade would end with Bally’s first move away from its core manufacturing business. On December 29, 1979, the company went from the manufacturing to the operational side of the industry with the opening of Bally’s Park Place, the third casino to open in the fledgling Atlantic City market.
Triumph and Decline
Bally would enter the 1980s as the undisputed king of the slot floor, and of the amusement arcade business. It would end the decade in a downward spiral.
The changes began as the decade began. Bill O’Donnell resigned his post as CEO. Taking over as chairman was Robert Mullane, a veteran of the securities and vending machine businesses who had joined Bally in 1971.
Mullane would oversee an era at Bally that saw diversification, triumph, and corporate excess. The 1980s began with a craze in arcade video amusement games, and Bally happened to be in prime position to capitalize. One of its diverse businesses was a chain of amusement arcades known as Bally’s Aladdin’s Castle which had grown from 20 arcades in 1974 to more than 220 by the end of 1980.
Bally had populated these arcades with its own games, most notably Space Invaders, which earned the company $133.9 million in 1980. In 1981, through a contract with the Japanese manufacturer Namco, Bally introduced Pac-Man, and a year later, Ms. Pac-Man, which became the most popular coin-operated game in history.
That same year, 1982, Bally bought Six Flags Corporation, the world’s second-largest amusement park operator, and Scientific Games, the nation’s largest instant lottery supplier. Within three years, the company owned health clubs, a fitness equipment manufacturer, and three more casinos.
In the midst of Bally’s buying binge, the company introduced the next generation of slot machines, and established the way slots would operate to this day. At the beginning of the 1980s, Bally introduced the first electronic slot machines. An inventor named Inge Telnaus had worked with Bally engineers in the late 1970s to perfect his “virtual reel” system. This would allow slot jackpots to rise higher than ever, thanks to a system in which numbers in a computer program related to each potential reel result would be generated at lightning speed by a random number generator.
At the same time, though, competition was heating up. Near the end of the ’80s, Bally found itself in a tooth-and-nail competition for reel-spinning slot supremacy. Its Blazing 7s game turned out to be its most popular in history, but soon, IGT released Double Diamond, Red, White & Blue and other hits. Bally ended the decade by ending its 50 years in the Chicago area. The company had moved in 1983 from its historic North Side plant to the Chicago suburbs. In 1989, the move was to its current headquarters in Las Vegas.
Rebirth and Revival
Mullane’s team had tried to sell off assets to relieve Bally’s growing debt burden, successfully unloading Six Flags in 1987 before the stock market crash.
By 1990, Bally was a $2-billion company, but was carrying $2 billion in debt. That year, the company was facing bankruptcy.
Enter Arthur Goldberg, a former corporate raider who offered to buy a 5 percent stake in the company in exchange for being installed as CEO. Mullane was out; Goldberg was in; and the fire sale was on. Goldberg identified the most profitable division of the company, the casino operations. Everything else, from fitness clubs to the slot manufacturing and systems divisions, were up for sale. The company’s name was changed from Bally Manufacturing to Bally Entertainment to reflect the new core business.
Hans Kloss, head of the company’s German Bally Wulff subsidiary, proposed combining German and U.S. manufacturing operations with the systems division and selling the package with a new public offering. The offering was successful, and Bally Gaming International, Inc. was created in 1992, with Kloss as chairman. Kloss would oversee Bally’s rebirth.
Tiberio chaired the game development panel—it also included game development veterans such as Bob Manz and Terry Daley—that would create the hit that would put Bally back on the slot map: Game Maker.
Game Maker wasn’t a new idea. However, it was brand-new to the commercial casino markets in Nevada, Atlantic City, and the new riverboat and Indian gaming jurisdictions emerging in the early ’90s. It was a smash hit.
Bally was back on a roll. The next several years would see Game Maker video slots spread across the industry. And, the company would soon reclaim its niche for traditional, reel-spinning slots with games like Black Gold, Diamond Line, and the game that Tiberio says is his proudest personal accomplishment—Bonus Frenzy. Other winners credited to Tiberio include Pick ‘Em Poker, by far Bally’s most popular video poker offering; and the Betty Boop slot theme, which was included on Thrillions, Bally’s first wide-area progressive link.
Today’s VP of game development, Mike Mitchell, has successfully exploited the new Bally technology while creating smash hits like Monte Carlo and QuarterMillions.
In 1996, Bally Gaming International was purchased by Alliance Gaming, the largest slot route operator in the business. This move would ultimately place Bally back on the New York Stock Exchange in 2002, but a more important development under Alliance was the naming of Bob Miodunski in 1999 as president and CEO. Miodunski would oversee the most critical developments transforming Alliance Gaming into today’s Bally Technologies, Inc.
New Day
At the top of those developments was the 2004 acquisition of Sierra Design Group, and with it the video platform that would become “Alpha.”
Miodunski retired after the SDG acquisition was completed, but Haddrill, along with new Chief Operating Officer Gavin Isaacs, took up where he left off to capitalize on the new drawing power of Bally games on the Alpha platform, in reel-spinning and video formats.
There also are some surprise successes this year, Isaacs says. One is the V-32 Roulette game, which was originally designed for Europe.
Another surprise success is a video blackjack game that displays up to seven hands against the dealer’s card for each round. The player can wager on any number of hands up to the maximum seven.
These and other games will soon be available on the new Game Maker, as Bally heralds its 75th anniversary with party events across the country.
Last year’s change of name from Alliance to Bally Technologies reflects two things, says Haddrill: First, it reflects the merging of technologies from the system side and new video platforms over the past few years. More importantly, though, he says the name change reflects a new emphasis on what is possibly the best-known brand in gaming.
“Bally is a survivor; we’ve got a lot of resilience in our DNA,” Haddrill says. “We’re still a work in progress, so it is an opportune time to celebrate.”
