And nobody is enforcing the law. That's led to the term "gray machines" because their status is neither black nor white.
State Del. John Overington, R-Berkeley, who attended a Friday meeting on the issue with owners of stores, taverns and clubs, said the machines should be outlawed.
Overington calls the machines "the crack cocaine of gambling" because the lights, bells and payoffs are enticing, especially to gambling addicts.
"The more you have these things, the more you are creating a category of people for whom it will be devastating on their lives," Overington said.
Del. Vicki Douglas, D-Berkeley, said bills on gray machines are introduced in the Legislature each year, but they go nowhere. "I think it might be time to deal with this," she said.
She wants either to ban them or legalize, regulate and tax them.
The latter option is favored by the West Virginia Club Owners Association, which hosted Friday's meeting at the Moose Lodge in Martinsburg.
The group will push its own bill to tax the machines at 15 percent of gross revenue. The bill also would restrict placement of the machines to areas in the establishments from which children would be excluded.
For each $100 that goes into a machine, $65 is paid out, said Chris Wakim, adviser to the Club Owners Association. Of the remaining $35, $5 would go to the state or local governments with jurisdiction where the machines are located. The machines would be tied in to the state lottery system.
Frazee was adamant about his future if the machines are banned or taxed out of existence.
"If they are eliminated from my store, my store will close," said Frazee, who has owned the store for 15 years. New regulations on underground storage tanks forced him to find new income a year ago. He installed the machines.
"It's crazy," he said. "At 2:30 in the morning, all eight machines will be in use and six more people will be standing in line waiting to play them."
Overington understands the owners' plight, but said the practice troubles him.
"I think any business should be able to stand on its own and not be subsidized by an activity that is not legal," he said. "If your business was being subsidized by prostitution, that wouldn't be right either."
Berkeley County Sheriff Ronald E. Jones took out a newspaper ad in April warning local residents the machines are illegal. But he acknowledged he could not shut them down.
"It was just a reminder to people," he said.
His deputies are too well-known to try to crack down on the machines in an undercover operation, he said. Gov. Cecil Underwood offered him state police support for a crackdown.
"I've received the offer," he said. "Will I use it? I don't know."
Frazee thinks a plan to legalize, tax and regulate the machines is probably the best solution.
"That should make everybody happy, except the churchgoers," he said.