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RALEIGH - A type of video slot machine commonly found in convenience stores, truck stops and bars would be outlawed under a bill approved Tuesday by a House Judiciary Committee.

Legislators who proposed the law say the machines' operators have exploited a loophole left open when the state passed a law in 2005 that banned stand-alone video poker machines.

"I would characterize this as whack-a-mole," said Rep. Ray Rapp, a Madison County Democrat. "Just when we think we've gotten it taken care of in terms of video poker and gaming, it pops up again."

Video poker involved stand-alone machines that operators could adjust to reward players more or less frequently and with higher or lower theoretical prizes. Many operators were arrested for paying out large sums of cash, which was illegal.

As those machines were phased out, operators with a new system entered the state. The system is based on the purchase of phone or Internet time. When they buy a phone card, players are entered into a sweepstakes administered by a remote computer server.

Purchasers find out if they win the sweepstakes by playing a computer game that looks and sounds like a slot machine. As the game proceeds, players can win or lose credit on their accounts.

"You could conceivably sit at this gaming terminal all day long ... It seems to fall through cracks of our current statute that prohibits video poker," said Rep. Melanie Wade Goodwin, a Richmond County Democrat.

Both Goodwin and Rapp said they had been approached by Alcohol Law Enforcement agents who have seen the machines proliferate throughout the state over the past two years.

Earlier this year, ALE agents raided businesses in Rockingham County and charged 10 people with operating illegal gambling devices in connection with the machines. Similar raids have taken place in counties throughout the state.

But in March, a Guilford County judge issued an injunction against ALE agents enforcing the law as part of a lawsuit brought by manufacturers, who say their machines should be legal. That forced Berger and other district attorneys to drop charges.

In some counties, such as Guilford, prosecutors have declined to bring charges, saying they believe the new video slot machines are legal. This disagreement among law enforcement and the Guilford County lawsuit have created confusion among players, store owners and those who sell the machines.

"Certainly, the clearer the law is the easier it is for everyone in the legal profession," Berger said.

The law given tentative approval Tuesday would clear up that confusion, making all such machines illegal on Dec. 1.

A lobbyist for one video slot machine operator said her client was guilty of bad timing but not violating the law.

"When I met them a couple of months ago, I'll be honest with you, I first thought these people are video poker reincarnated. And they're not, they just got unlucky," said Theresa Kostrzewa, a lobbyist for Hest Technologies who asked the committee to delay making a decision on the bill.

Video poker was part of a string of scandals that plagued former House Speaker Jim Black, who was later convicted on corruption charges.

"I told them, you're going to be guilty by association, but I know you're not breaking the video poker law," Kostrzewa said. "They're playing a legal sweepstakes game."

She warned that manufactures might sue the state if the General Assembly outlawed the video slot system.

But the Judiciary Committee approved the bill after a few changes. It will next go to the Finance Committee before a vote on the House floor. Because of how the bill was drafted, the Senate could pass the measure without sending it to a committee.

Contact Mark Binker at (919) 832-5549 or mark.binker @news-record.com