There were a few jurisdictions, Iowa and New Jersey come to mind, that were already aware of the nature of these machines and required the manufacturers to have their software audited and validated by (state approved) third-party gaming labs identical to what the slot machine companies do when getting code approved for release.
The key point was that the probability of a win couldn't be adjusted on the fly to make the target payout percentage (kind of what the article says). The probabilities had to be fixed for every player on every game. Although the first method is a lot easier to write, software-wise. =)
For the rest of the jurisdictions, the default payout was 40% and anything was fair game to hit that number. Remember that the next time you're in a Chuck E Cheese.