Yes completely valid as the slot machine will have a payout ratio it must stick to, I think this is part of the law in some countries that regulate the industry. So just on a simple take if you follow a series of losses the machine is now heavily in profit and is far more likely to pay out. There should be alot written about this strategy and the various dynamics and rulesets for the machine to follow that you can rely on, like any system of probability its not certain but better odds then normal sure.
Its so well known I can remember decades ago a Bar tender in a club I went to topped up his wages doing as much. He was friendly to everyone making food etc. but he was pretty crafty I guess. Not really illegal so far as I know but obviously he is there 8 hours or more and can see directly who wins or loses and roughly how much, it gets quiet and he hops on for 5 minutes to take some cash back out the machine. I'm sure over the course of a year he would make 4 or 5 figures this way just continually gaining the money after people had lost and had to leave to get their lift etc.
The minimum theoretical payout percentage varies among jurisdictions and is typically established by law or regulation. For example, the minimum payout in Nevada is 75%, in New Jersey 83%, and in Mississippi 80%.
Yes, many years ago such a system worked and many people knew about it (even in this topic, many participants immediately described this algorithm), but this is hardly relevant today. Firstly, if slot machines are connected to an online network, then we cannot monitor all of them at the same time, therefore we do not know which event is more likely to happen next - a loss or a win. Secondly, if ordinary players knew about such an algorithm, then the regulators and the owners of slot machines knew about it. This means that, most likely, to complicate the work of such an algorithm, the betting distance at which the slot machine should fit into the legal interest was significantly increased.