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Diamondhead Casino Issues Status Report

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, is issuing a status report for its shareholders.

The Governor of Mississippi signed a new law on October 17, 2005, which allows casinos to be built on land, but 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 property is lien-free and debt-free.

Since the new law was passed, the Company has received, and continues to receive, various proposals relating to the development of its property. The Company continues to negotiate with respect to proposals received and continues to discuss options for projects involving all or part of the 404 acres and for projects which may include not only casino resorts, but condominiums, condo-hotels, entertainment centers, retail centers, and various combinations thereof. The Board of Directors believes its shareholders should know there is genuine interest on the part of viable parties in the development of the Company's Diamondhead property and that it is the intent of the Board of Directors to negotiate a fair deal for its shareholders. The process of evaluating proposals, together with their various financing alternatives, is complex. It is also important for our shareholders to understand that the complexity inherent in developing 404 acres is great due to the number of options a tract of land of this size offers to interested parties. The Company wants to assure shareholders that, while this process may be more time consuming than many realize or would like, steps are being taken to frame a deal that the Board believes is in the best interest of its shareholders.

While the Company is optimistic, there can be no assurance that any discussions or negotiations will result in a transaction with the Company. The Board intends to condition any final agreement on approval of a majority vote of shares entitled to vote and voting on a proposal. The Company believes that such approval is in the best interest of its shareholders.

The Company has current cash on hand of approximately $1,000,000. This amount includes $100,000 tendered by the Company's President and Vice President for options which expire in March of 2006.

The Company is also pleased to announce that Mr. Carl Stevens, a major shareholder in the Company, has been elected to the Board of Directors. In commenting on his election to the Board, Mr. Stevens stated: "I have been a shareholder of the Company since 1997 and have added to my stock position over the years. I am familiar with the Gulf Coast of Mississippi and have walked the Diamondhead property. I am convinced that the Diamondhead project represents a major development opportunity. I believe this is a pivotal time for the Company and I intend to do whatever I can to help maximize shareholder value. I am excited about the Company's future prospects and delighted to be a member of its Board."

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