BIRMINGHAM, Ala. (AP) – Sitting at a video machine that operates almost exactly like every slot machine she’s ever played, Debra Dennis believes she’s gambling in a casino, even if the owner and a judge say she isn’t.

The cavernous room has garish carpet, smoky air and cocktail waitresses in short skirts. It’s filled with flashing machines that bing, bong and spit out recorded sounds of coins hitting a metal tray. To top it off, Dennis said she already has lost $275 in an hour.

Welcome to Quincy’s MegaSweeps, a new “video sweepstakes” venture that reopened this week after a judge ruled it was, in effect, nothing more than a fake casino with “sham” gambling machines – all legal under a loophole in Alabama law.

“If it’s not gambling they owe me $275,” said Dennis, of Lake, Miss.

The district attorney wants to shut down the operation and plans to appeal. But for now, gambling magnate Milton McGregor is free to run the venture inside his dog track, the Birmingham Race Course, which has struggled for years against competition from Mississippi casinos.

An analyst said the nation’s gaming industry is keeping an eye on the operation to see how it fares both financially and legally as companies seek new footholds in states that prohibit true casino gambling.

“This is a new venture,” said the analyst, Brian McGill of the Susquehanna Financial Group near Philadelphia. “(A judge says) even though it looks like a slot machine and acts like a slot machine, it’s not really a slot machine.”

McGregor opened Quincy’s MegaSweeps in December, only to have it raided a few days later by Jefferson County sheriff’s deputies. A court fight ensued, with Sheriff Mike Hale claiming the operation was an illegal gambling venture and McGregor contending it was legal.

After a hearing, Circuit Judge Scott Vowell sided with McGregor.

People who believe they are gambling “don’t understand” the way the MegaSweeps works, McGregor said. He and Texas-based game manufacturer Multimedia Games Inc. spent “a ton” on the machines and creating an atmosphere “that looks like something it’s not.”

“It is complicated, but it complies with the law,” he said.

On a typical video slot machine, players put in money and hit a button, sending images of video wheels into motion on a screen. They win cash if objects like apples, stars and bars line up three in a row.

All that and more happens at McGregor’s business.

Customers still plunk down cash at Quincy’s MegaSweeps. For every $1, they get four minutes of computer time at an adjacent Internet cafe plus an electronic card with 100 credits that can be used to play the video machines.

McGregor says each credit is really an entry into a video sweepstakes, and players swipe their cards on the slot-like machines to see if their entries are winners. Losers watch their balance drop to zero; winners get to cash out at a casino-like cashier’s cage.

McGregor argued in court that the machines only reveal winning entries and aren’t games of chance, despite their appearance. The judge said the machines are “a sham” designed to make customers believe they are gambling when, in fact, the outcome is determined when they buy their credits.

The judge also invited legislators to take a look at changing the law if they want to shutter such sweepstakes ventures. Gov. Bob Riley and Attorney General Troy King said last week they would ask lawmakers to do so.

All the legal arguments and politics seemed lost on the hundreds of people who flooded into the faux casino during the first hours the video machines flickered back to life Thursday. No one was using the internet time, but hundreds were hovering around the fake slots.

Retiree Peggy Hardin of Birmingham joked with a couple of MegaSweeps employees about the idea that the machines aren’t gambling. Then she went back to play some more, hoping to win back some of the money she’d lost.

“It’s gambling. Of course it’s gambling,” she said.