Quapaw Tribe’s Remarkable Success Rose From HumbleBeginnings

52 Indian Gaming April 2011

At NIGA 2006, a couple of Quapaw Tribe leaders casuallyperused the tradeshow floor with an idea turning in

their heads. They attended the seminars and receptions, tooknumerous mental notes, and made inquisitive small talk withother attendees. Piece by piece, like filling in a jigsaw puzzle,the image behind their eyes took form and color. As it turnedout, that NIGA visit was an important setting for helpingthem coax their idea with its hundreds of details and seeminglycountless obstacles into a bold and fateful plan.

At that time Indian gaming was booming all over thecountry. The Quapaw Tribe had been operating a humblelittle casino in Northeast Oklahoma, part of a cluster ofsimilarly humble Indian casinos in and around the small townof Miami (pronounced Mia-muh), located in the quickly fad-ing former mining district where for almost 100 years the landgave up its lead and zinc and by now was mostly a dry, blightedlandscape. For many decades the basic idea of economicdevelopment had been an elusive concept for the Quapaws.Most tribal members trudged through a daily working existence,living within a few miles of where they’d always lived, contentwith a slight boost in status from their little casino – notknowing any worse, not knowing any better.

But a new set of tribal leaders had been awakened to newpossibilities in gaming, and they were thinking about a bit ofland the tribe had access to at the extreme tip of the state, whichin fact touched all three states – Oklahoma, Missouri andKansas – and was within sight of Interstate Highway 44, a majoreast-west corridor through the country’s heartland. Theyunderstood how this ideal, quirky location held promise forsomething special if they could pull it off.

Less than a year after NIGA 2006, they charmed their wayinto a consultant relationship with the gaming legend MickeyBrown. Next, they cleverly and skillfully cleared numerouspolitical and financial hurdles. By Summer 2007 the QuapawTribe was well under way in building its Downstream CasinoResort. The name came from the direct translation of theoriginal tribal name O-Gah-Pah, meaning the downstreampeople. They worked fast and smart in constructing the $300million resort, the first upscale property of its kind in thearea, and made their financing go further than anyone expected.

They opened in July 2008 on the doorstep of the GreatRecession. But they had already shown themselves to be quitesavvy, thrifty and resourceful. It wasn’t long before industryinsiders began to take notice.

“The Quapaw Tribe’s achievement with Downstream hasbeen truly remarkable,” said Kristi Jackson, a Los Angeles-basedgaming investment banker and CEO of Tribal FinancialAdvisors. “They raised their money and started constructionjust barely ahead of the economy’s downturn. There was nolooking back. In that situation there must have been a millionways for it to crash in on them and only one way it could workout. They made very smart decisions along the way.”

The result is a beautifully designed property with ameticulously executed business plan. Scaled to fit the marketwhile offering amenities and service unlike anything seenbefore in the region, Downstream Casino Resort includes astate-of-the-art gaming floor with 2,000 machines, 32 tablegames and a poker room with 14 tables. The upscale hotelincludes 222 rooms (15 luxury suites), a VIP lounge withprivate bar, a serene swimming pool area with semi-private

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April 2011 Indian Gaming 53

cabanas, and meeting/banquet space to accommodate groupsof up to 1,500 persons. The resort has five restaurants includ-ing the Red Oak Steakhouse for fine dining and the Spring RiverBuffet featuring display-cooking stations. There is a sports barthat features live bands, and an elevated upscale bar and loungein the center of the casino. The entire property has beendescribed as “elegant yet earthy.” Nearby is an immaculate18-hole golf course, as well as a 6,000-seat outdoor concertvenue where Tony Bennett performed for its first concert inFall 2008.

Downstream’s financial performance has surprised everyone,including the Quapaws themselves, much to the liking of theiroriginal financial partners. “We have outpaced our originalmodel and exceeded our own expectations,” said John Berrey,Chairman of the tribe’s governmental Business Committee aswell as Chairman of the Downstream Development Author-ity, which operates the resort. “So we feel like we must have aspecial chemistry or mojo or something. We’ve got a great teamand we work very hard and very well together.”

The recession took its toll on the entire industry, showingdouble-digit annual declines for the past three years in manyareas. Downstream has experienced continued and sustainedrevenue and margin growth since its opening. This has caught

the eye of the industry’s financial analysts. Recently, Bankof America/Merrill Lynch’s Gaming Market Weekly Updatenoted that Downstream’s 12% Senior Notes were among thecountry’s top performing gaming high yield bonds in terms of

Performance Numbers

Casino guest counts: In fiscal year 2008 (a partial yearsince the resort opened in July 2008) 531,629 guestsentered Downstream Casino Resort; in FY 2009, therewere just over 2 million guests; and in FY 2010 there were2.2 million guests.

Hotel occupancy: (the hotel was not open in FY 2008);In FY 2009 the hotel was 76.8% full; in FY 2010 the hotelwas 91% full.

Restaurant covers served: in FY 2008 (a partial year sincethe resort opened in July 2008),Downstream’s restaurantsserved 118,400 people; in FY 2009 the restaurants served427,600people; and in FY 2010 they serve 507,000people.

April 2011 Indian Gaming 55

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total return (week ended February 28, 2011).Performance figures indicate business growth in the range

of 10% to 12% annually over the past three years – growth thatis extremely rare in the gaming industry these days, Jacksonsaid. “They are among the country’s top performing newgaming properties and the envy of tribes across the country.”How have they done it? “Leadership,” she said. “Strong, smartleadership from the Downstream Development Authority.”Before the 2008 opening, the DDA recruited some of the bestpeople in the business to relocate to Northeast Oklahoma byconvincing them that Downstream was a good bet. They builta superb team, and they kept their promise about Down-stream’s possibilities, according to Jackson.

When Jackson and others talk about the driving forcebehind Downstream’s success, one name invariably rises to thetop – Chairman John Berrey.

“There would not be a Downstream if it weren’t for Chair-man Berrey,” said Mickey Brown of Sea Girt, N.J., one of thecountry’s most revered gaming resort developers. Brown wasDownstream’s Project Manager during the development andconstruction phases in 2007 and 2008. “John was the keymover then, and he is today the driving force that keeps

Downstream on a winning course. The investors, the employ-ees and the community all know that Downstream is what itis today because of the efforts of John Berrey.”

For his part, Chairman Berrey takes it in stride and funnelscredit to his DDA colleagues, particularly those who took partin the development and opening – J R Mathews, LloydBuffalo and Ranny McWatters. And he takes a balanced viewof the current success and the future.

“I’m happy for the Quapaw people. Downstream hasimproved our lives in numerous ways. I’m also happy for ouremployees and our community partners. But we shouldn’t gettoo caught up in patting ourselves on the back,” he said. Thisis a competitive business and it’s going to take a lot of contin-ued hard work to remain successful, he said, adding that therehave been numerous tribal casinos that achieved financialsuccess then self destructed.

“The good news is the economy is beginning to recover.If we can accomplish what we’ve done during a recession, justthink how well we can do in a strong economy.” �

For more information about Downstream Casino Resort, visitwww.downstreamcasino.com.

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