They are similar in playing style to a slot machine but they are not the same as a slot machine. VLTs in every jurisdiction that I have found referenced are more like bingo, pull-tabs, scratch-offs, and lotto then they are to a slot machine because there are a pre-determined number of winners and you are competing with the other players for a prize; not against the house. There is not necessarily a winner in each game. The game continues until there is a winner.
You need to understand a little about the classes of gambling machines in order to get a handle on this. There is no federal law is to govern slot machines, so different jurisdictions may define things differently. Indiana being the closest state and whose definitions extremely similar to all the others are the definitions we will use.
Class I gaming is defined as "social games solely for prizes of minimal value or tradition forms of Indian gaming engaged in by individuals are a part of, or in connection with, tribal ceremonies or celebrations."
Class II gaming includes bingo, pull-tabs and scratch-offs, lotto, and other games similar to bingo.
Class III is everything else, including banking card games and Las Vegas-style slot machines.
So, what's the difference between a Class II and a Class III video gambling device? Class III machines use the random number generator (RNG) in the machine to determine the results of a spin. No other device or computer is used. Each spin can be a winner even on multiple machines at the same time. Class II machines are not allowed to determine the results. The results are determined at a central location. This makes these machines more like bingo or a lottery than a real slot machine.
That central computer may be located at a Lottery commission or it may be a free standing network within the casino. Whichever method these machines may and usually are monitored by the government using a separate computer, to ensure casinos are running them according to law.
It appears to this writer that Video Lottery Terminals are a poor work-around and substitute for a slot machine. The have proliferated where the government was unable or unwilling to change the existing laws.
They are something the Commonwealth can do without. If we are going to do gambling, we should do it right.
If the games were controlled from lottery headquarters under the full control of the Kentucky Lottery Corporation AND the game providers acted in essentially the same capacity as the current lottery retailers the General Assembly could most likely do an end run around the wishes of the people and legislate this into reality as being part of the lottery.
My personal opinion is that they should not do this. Let me say it one more time.
Do it right or don't do it at all.
edit: 02-15-2020 I have changed my position on this. The second generation machines play very much like a real slot machine.