INDIANAPOLIS -- The owners of Indiana's racetrack casinos cite unfair state taxes and fees for forcing them into the red, which could cause at least one to fold.

The testimony came during the first meeting of the Gaming Study Committee, tasked with studying legalized gambling in Indiana and making recommendations on ways to keep the industry competitive, 6News' Norman Cox reported.

While Indiana's so-called "racinos" have attracted large numbers of gamblers in their first two years, the economy has hurt the bottom line at places like Hoosier Park & Casino in Anderson and Indiana Live Casino in Shelbyvillle, while high taxes haven't helped either, owners said.

"We paid over $64 million in state and local gaming taxes and state and county payroll taxes," said Fred Burford with Indiana Live, who said the casino had lost $50 million. "Unfortunately, this partnership has not worked out so well for us."

Hoosier Park would not divulge its financial loses, but owners said the racetrack casino could close if the state doesn't change what they call a broken business model.

"(It's) a model that destines Indiana's race track casinos to eventual failure," said Jim Brown with Hoosier Park.

Both casinos want the state to drop what they call double taxation, which owners said puts them at a disadvantage with the state's riverboat casinos.

Besides the graduated income tax on revenue, the casinos must pay 15 percent of their adjusted gross revenue -- the amount they get after paying out winnings -- mainly to prop up horse racing purses. They have another 3 percent local tax and 1 percent tax to help subsidize a casino in southern Indiana's French Lick.

Sen. Luke Kenley, R-Noblesville, and the other co-chairman of the interim committee, said lawmakers do not want the racinos to fail.

But, he said, "We need to remember that they voluntarily entered into this agreement and all of the terms and conditions were known at the time they did that."

The General Assembly passed legislation in 2007 allowing Hoosier Park and Indiana Live 2,000 slot machines each at their pari-mutuel venues.

Casinos and the lottery bring in about $1 billion a year in state and local tax revenue.

Members of the Gaming Study Committee will meet two more times before making recommendations to next year's Legislature.