A Senate committee voted unanimously this week to ban TouchPlay machines and give operators 30 days to shut them down.
"There should not be slot machines in every nook and cranny of the state," said Sen. Larry McKibben, R-Marshalltown.
Some lawmakers are worried about the financial implications facing the state, saying businesses have made huge investments in the TouchPlay machines.
"They were led to believe that the state wanted to partner," said Sen. Mark Zieman, R-Postville. "Now we're going to tell the same group of people who made the investment that we're going to pull the rug out from under them."
Despite those concerns, the Senate Government Committee voted 16-0 to approve a ban. The vote came a day after a House committee overwhelmingly approved a similar ban.
The machines are nearly identical to slot machines and have spread to thousands of locations around the state.
State lottery officials say the Legislature authorized the machines, but lawmakers said they were not prepared for the scope of the machines' expansion.
"These machines have never been debated in this Legislature," said Senate Democratic President Jack Kibbie, of Emmetsburg. "The purpose of this legislation is to have a debate."
As lottery officials prepared to release more than 120,000 financial records on TouchPlay lottery machines Friday, some business owners filed lawsuits to keep the information confidential.
About 5,600 of the machines are in use.