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RIVERDALE — A bingo parlor with a history of controversy is under investigation again for suspected gambling, according to newly released search warrants.
Riverdale police have opened an investigation into Frankie’s Dinner and Bingo, 4510 S. 900 West, for suspicion of gambling, according to two search warrant affidavits unsealed Tuesday in 3rd District Court.
Riverdale police are already familiar with Frankie's.
In 2007, the Riverdale City Council revoked the business license of Riverdale Dinner & Bingo for violating state gambling law.
Owners of the business filed a federal lawsuit against the city, claiming police threatened to arrest employees if the club didn't close in December 2006.
After months of negotiation, the restaurant was granted a new business license in 2008 and reopened under a new name, Frankie's. The owners touted the business as a place where a person can purchase a dinner and play bingo for free. Winners have the chance to walk away with cash.
In 2010, Riverdale police again investigated the business for a sweepstakes program called Magic Ball. The investigation prompted the owners to sue Utah and the Utah Attorney General's Office, claiming the state's gambling statute was unconstitutionally vague.
According to the new search warrants, Riverdale police began their latest investigation in November. An undercover officer went to Frankie's at least five times, the affidavit states.
"It was explained … by employees that you pay the front desk clerk money for what is called 'coffee credits' that are loaded onto the card. Upon payment, you receive four game pieces per dollar spent and a receipt is printed which contains a nine-digit number. It was explained … that the coffee credits can be used to purchase coffee and food products. The game pieces are then used to play a game called Dab-N-Dash which was found on approximately 43 gaming devices," the warrant states.
But in addition to food items and coffee, players also have the opportunity to cash out, according to the warrant.
"Upon viewing the inside of the business, it was abundantly apparent that the gaming devices took up approximately 75 percent of the floor space in the business. The coffee counter is a small counter in the corner where a small case sits on the counter and contains anywhere from four to 10 donuts," the officer noted in the affidavit.
"After five visits in an undercover capacity, it’s clear that the primary purpose of the business is the Dab-N-Dash game and that coffee and food is ancillary."
To further investigate whether credits were being used for food purchases or payouts, police also checked all of the food purchases Frankie's made from its distributor from 2009 to 2015.
"Taxable food sales only total 8 percent of the business. The other 92 percent of the business involves exempt sales from the purchase of coffee credits," the warrant states.
A second warrant was also served at Southgate Social Club, 3725 S. 900 East, where a similar operation involving coffee credits and Dab-N-Dash was discovered, according to the warrant. Frankie's and Southgate are owned by the same person.
After receiving assistance from the Utah Attorney General's Office in its investigation, police crunched numbers and determined: "From 2009 to 2015 Frankie’s Dinner and Bingo reported total sales of $116,750,803.93 to the Utah State Tax Commission. Only $9,179,250.70 were reported as taxable sales, meaning $107,571,553.23 were exempt sales that were never taxed. This shows that Frankie’s Dinner and Bingo brought in $116,750,803.93 from 2009 to 2015 but only sold $9,179,250.70 worth of coffee thus showing that gambling is the primary purpose to the business and that coffee is the secondary purpose of the business," the affidavit states.
The $107 million in exempt sales was coffee credit purchased but never redeemed by customers, according to the warrant.
Search warrants at both businesses were served simultaneously on June 29. Computers, cash and hard drives were among the items seized, the warrant states.
As of Tuesday, no one has been arrested and no charges have been filed in connection with the investigation.
Riverdale police told KSL that no one would be available until Thursday to answer questions from the media. The Utah Attorney General's Office on Wednesday declined comment.
An attorney who represented the owner in one of his prior court cases said Wednesday she could not comment on the new search warrants but said she would contact people who were authorized, and leave it up to them whether they wanted to comment. No calls were returned.
