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Modern casino slots are controlled by computer chips and software, and the win percentages are preprogrammed in to the software.
Casino slots have Random Number Generators (RNG) which are continually generating combinations, regardless of whether the equipment isn't being played.
Running concurrently with the RNG of the casino trusted safe slot machine is the payout percentage.
The payout percentage controls just how much the slot machine will payout, for example the payout percentage could be 90%, meaning the slot game will payout 90% of all of the bets played and also the casino only gets to keep 10%.
This is not to say that every time you bet 10 credits you shall receive 9 in return - where will be the fun and excitement in that? Instead the casino slot machine game will not pay out for a while, and then suddenly go on a hot streak and you might hit a big jackpot.
So in essence the slot machine takes all the money played into it and pays it out to few lucky winners. The casino only gets to keep a relatively small number of all of the bets placed.
The casino slot software controls every a component of the machine, from the flashing lights to the spinning of the reels.
Whenever you hit spin on the slot machine, a combination is produced through the RNG which corresponds to the images on the reel.