The gas is leaking past the needle valve in the carburetor.
This is due to either wear to the needle valve and seat, a defective float, or dirt/grit stuck between the needle and seat.
If you have gas coming out of the exhaust you also have gasoline in the engine oil. You must do two things right away before you operate this engine.
(1) install an inline fuel shutoff valve between the fuel tank and the fuel filter. From this point on for the rest of your days with this machine.......you must turn off the inline fuel valve whenever you stop the engine. If you forget to turn off the fuel, you will be right back where you are today.
Running an engine with gas in the lube oil will destroy the engine.
(2) Change the oil (and oil filter if it has one) after installing the fuel cutoff valve and before you operate the engine again.

This is quite a common occurance when the machine has a gravity fed fuel system. I'm really amazed that the U.S. EPA has not mandated some type of automatic, secondary (the float needle being the "primary") fuel shutoff device to prevent this event from happening.

We emphasize: CHANGE THE OIL AND FILTER BEFORE RUNNING ENGINE !!!