But if the roulette wheel is broken so that the ball occasionally flies off, and the casino just says "ok, everyone loses" I don't think that would stand.

True. But in this analogy, I hardly think you can claim "everyone loses".

I'm curious; what's to prevent a casino from saying that prizes were actually technical errors whenever it was convenient to them?

If the casino believes that the machine has been corrupted or is broken, they call in the state's gaming commission which is supposed to act as an independent technical 3rd party. The machine is inspected and it's code compared to a known registered checksum.

Casinos can say "technical error!", but there is an advocate for the player in this situation. Usually. (Avoid Indian casinos in the USA for this reason).