I ordered the seals and will put them in next week when they arrive thanks for the input.Are you sure it's exhaust and not steam from water getting hot? If there is water in there it could short out the mag. If there is oil and gas in there you probably have a broken or displaced crank case seal. There is one on the mag side and one on the clutch side but they sell them together. You should check it, it's possible it just got displaced and isn't damaged. If the seal is leaking you should lose compression and power or it might not even start.
Replacement seals---> https://www.ebay.com/itm/2-Pcs-49cc-66cc-80cc-Motorized-Bicycle-Motor-Crankcase-Crank-Case-Seals-H-SL14/401392911185?ssPageName=STRK:MEBIDX:IT&_trksid=p2057872.m2749.l2649