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El Segundo firm cashes in on slot machines


Ask anyone at L.A. Slot Machine Co. for advice on gambling and you’ll hear the same thing: walk away, the odds are overwhelmingly against you. Despite the expert advice, business has never been better for the company that repairs and sells used slot machines. Last year, the El Segundo company posted a $7 million profit. This year it expects to earn $10 million. Over the past three years, its sales have doubled.

“We’ve come a long way,” said co-owner Larry Zeidman, who started the company in his parents’ garage 22 years ago. “Sometimes I sit back and try to take in how incredible all of this is, but for the most part it’s been a very slow growth business.”

L.A. Slot Machine is the largest company of its kind in California and one of the largest in the country. Its inventory is so large it occupies three warehouses and is looking to expand into a fourth one. Zeidman, a college dropout, started the company more to support his penchant for older casino machines than to hit a jackpot in profits.

The first machine the Culver City native bought was an antique in need of repair. He found two more in the same condition and, after fixing them, sold them. For 10 years, Zeidman kept doing the same thing, selling refurbished antique machines to individuals, until he realized he could make more money selling newer machines.

During the past 12 years, most of L.A. Slot Machine’s sales have come from shipping slightly used modern machines to up-and-coming international casinos. It regularly sends refurbished slots to Russia, Laos, Thailand, Colombia, Honduras, Guyana, Ukraine and other countries.

Zeidman’s brother, Scott, who co-owns L.A. Slot Machine, expects the company’s prosperity to continue. “I think in 10 years we’re going to take over a whole street,” said Scott Zeidman who used to work at a law firm before coming to help his brother. “We’ll just call it L.A. Slot Machine Street. But seriously, gaming rooms are becoming increasingly popular, not just in the United States, but in other countries as well.”

Scott added that owners of these new casinos would rather stock their gaming rooms with used slot machines than more expensive new ones. Hollywood considers the El Segundo company on Lairport Street a good source of props. The company’s slot machines have appeared in numerous movies and TV shows, such as “Ocean’s 11,” “Rush Hour 2” and “Friends.” The company is considering some new ventures as well.

It has developed a new slot machine game it wants to begin selling to casinos, and the brothers are in talks with Costco to begin selling slot machines at the wholesaler’s Arizona locations.

Slot machine ownership laws vary from state to state. Arizona residents are allowed to have personal gaming rooms, but not large casinos. In many states, owning a slot machine as a collectible, not as a gambling device, is legal. Several states, including California, allow ownership of antique slots — 25 years or older — only, according to L.A. Slot Machine’s Web site, www.laslots.com. The Zeidman brothers credit their success to their employees and relaxed working atmosphere.

“It’s like going to see the doctor for something serious,” Scott Zeidman said. “You don’t want just anyone, you want the best. It’s the same thing for us. We do our best to attract the best workers and keep them here.