In a written statement, lottery director Ed Van Petten, said that he was disappointed in the Senate's vote.
The Minnesota lottery online games launched last year without explicit legislative approval.
Van Petten describes the the online platform as an essential way to reach the next generation of players, who prefer to do transactions online rather than in person.
A similar bill was passed by the Legislature in 2014, but Gov. Mark Dayton vetoed it. Dayton isn't saying if he'll block this year's bill, but lawmakers aren't ruling out an override attempt if he does.
Lottery officials would have 130 days to wind down the games. But those officials warn that vendors could seek legal millions in damages for pulling out of contracts.
Minnesota leaders sit down together to discuss budget
Minnesota's top lawmakers are rotating in and out of closed-door meetings in search of a state budget compromise.
Gov. Mark Dayton met with Republican House Speaker Kurt Daudt and other Republican leaders to discuss numbers. Minnesota has a 1.8 billion surplus that they feel shouldn't be turned into tax relief.
Daudt believes they are still quite a ways away on a framework, but he thinks they'll reach a budget deal before the end of the session.