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Diamondhead Casino Extends Special Use Zoning

MADEIRA BEACH, Florida – (PRESS RELEASE) -- Diamondhead Casino Corporation (OTC Bulletin Board: DHCC), which owns approximately 404 acres of land on the Bay of St. Louis in Diamondhead, Mississippi, issued its second 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 Diamondhead, Mississippi property located on the Bay of St. Louis in Hancock County. The property is lien-free and debt-free.

On November 17, 2005, the Hancock County Planning Commission passed a resolution extending to December 31, 2006, the Waterfront Special Use District designation previously granted to Casino World, Inc., a subsidiary of the Company. On November 22, 2005, the Hancock County Board of Supervisors ratified the resolution. This zoning designation is a prerequisite for gaming on the Company's Diamondhead property.

Litigation Update

The Company also reported that major litigation with Charles Liberis, the founder, a former President, CEO, and Director of the Company, had concluded in favor of the Company. Mr. Liberis sued the Company and certain directors and officers of the Company, including its current President, on multiple occasions. Mr. Liberis appealed a decision of the trial court entered in favor of the Company in the latest litigation. On November 2, 2005, the District Court of Appeal of Florida for the Second District affirmed the trial court's ruling. Mr. Liberis did not request a reconsideration of the ruling in favor of the Company or its directors and officers.

Deborah A. Vitale, President and Chairman of the Board of Directors, commenting on the favorable legal ruling, stated: "This is an excellent outcome for the Company. Liberis-related litigation has continued, virtually non-stop, for the past thirteen years. This litigation has consumed an enormous amount of the Company's time and financial resources. There is now no litigation pending against the Company for which the Company is at risk for damages."

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