Diamondhead Casino Corporation Issues Status Report

Diamondhead Casino Corporation, which owns approximately 404 acres of land on the Bay of St. Louis in Diamondhead, Mississippi, issued its first status report since the Governor of Mississippi signed a new law on October 17, 2005, which allows casinos to be built on land. The new law will allow casinos located in certain areas to be constructed on land no more than 800 feet from the mean high-water line of certain bodies of water. The new law applies to the Company's property on the Bay of St. Louis.

The Company reported that since the new law was signed, it has received several written proposals relating to its property. These proposals range from outright offers to purchase land to joint venture proposals. The Board of Directors has rejected several proposals, but is considering others and management continues to negotiate with respect to several proposals received. There can be no assurance that the Board will find any of these proposals acceptable to the Company or that further negotiations will lead to any definitive agreements. The Board intends to condition any final agreement on approval of a majority vote of shares entitled to vote and voting on the issue. The Company believes that such approval is in the best interest of its shareholders.

The Company also reported the unexpected resignation of Dr. Arnold Sussman, who resigned from the Company's Board of Directors for health-related reasons. Dr. Sussman, a significant shareholder, served as a member of the Board of Directors since July 2002. Dr. Sussman's contributions as a Director went far beyond those required of a Director and his presence on the Board will be missed.

The Company, through its wholly-owned subsidiary, Casino World, Inc., intends to develop a destination casino resort and hotel, condominiums, and other amenities at its Diamondhead property. The development of the Diamondhead, Mississippi project is subject to risks and uncertainties which include, but are not limited to, those relating to permitting, financing, the activities of environmental groups, the outcome of litigation and the actions of federal, state, or local governments and agencies. The Company may be affected by some or all of these factors and other risks and uncertainties, many of which are beyond the Company's control. Except for historical statements contained herein, the statements made in this release constitute forward-looking statements that involve risks and uncertainties. Any references in this press release to Mississippi law are qualified in their entirety by reference to the actual text of the law.