Since 1983, slot machines in North America have used a computer and virtual reels to determine the odds. Since at least 1988, a technique called clustering has been used to create a high number of near misses, failures that are close to wins. The result is that what the player sees does not represent the underlying probabilities and randomness, and this misrepresented outcome will have some effect on the player's perceptions of the game, which may lead directly to classical and operant conditioning, the frustration effect, the perception of early wins, illusion of control, biased evaluation of outcomes, entrapment, and irrational thinking. We use transcripts of Nevada hearings to show that the initial proponents understood that virtual reels and near misses may have a detrimental psychological effect on the player. We conclude by suggesting that jurisdictions should consider the historical facts and research presented in this paper when pursuing responsible gaming practices for slot machines.