Diamondhead Casino Corporation Announces New Law Allowing Land-Based Casinos In Mississippi

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. October 14, 2008

BILOXI, Mississippi, October 18, 2005. Diamondhead Casino Corporation, which owns approximately 404 acres of land on the Bay of St. Louis in Diamondhead, Mississippi, announced that Mississippi's Governor signed a bill into law today that will allow casinos in Mississippi to be constructed 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 law signed today differs significantly from the law previously in effect, which required that a casino at the Company's site be constructed in, on, or above water and be located a minimum of 50% below mean high tide. The new law allows the Company to avoid any permits, authorizations, or leases that water-based construction would have required, but that land-based construction at the site may not require.

The Company believes that the advent of land-based gaming in Mississippi will have a positive effect on the entire industry and change the whole perception of the gaming industry in Mississippi from that of a riverboat or barge-based industry, to that of a Las Vegas style or Atlantic City style industry. With respect to the Company's property, management believes the impact of the new law will be beneficial. The Company believes that its property, which fronts Interstate 10 for approximately two miles and which fronts the Bay of St. Louis for approximately two miles, is strategically located to take maximum advantage of the new law. In addition to a destination casino resort, the Company believes its property is also well- suited for other real estate uses, including the development of condominiums.

The Company is currently engaged in discussions with potential joint venture partners and with potential purchasers of all or part of its property. There can be no assurance that any discussions will eventually result in any proposals that are acceptable to the Company.

The Company, through its wholly-owned subsidiary, Casino World, Inc., intends to develop a themed, destination casino resort and hotel at its 404-acre site on the Bay of St. Louis in Diamondhead, Mississippi. 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.