Casinos Austria extends Letter of Intent with Diamondhead Casino Corporation

The non-binding Letter of Intent, which expired last September 21, was extended through December 21, 2008. While Casinos Austria has completed substantial due diligence and is pleased with the results and findings obtained to date, it requires additional time to complete its remaining due diligence.

Paul Herzfeld, CEO of Casinos Austria, commenting on the extension stated: "We are excited about the prospects for the Diamondhead site and are in the midst of conducting our legal, engineering and related due diligence. We have a long history and long working relationship with the Company and its current President and CFO which gives us an added level of comfort. However, recent hurricanes and adverse weather conditions in the area have interfered with our ability to conduct the required due diligence."

The joint venture, if consummated, would cover fifty acres within a 404-acre tract of land owned by Mississippi Gaming Corporation, a wholly-owned subsidiary of the company. The Diamondhead tract fronts Interstate 10 for approximately two miles and the Bay of St. Louis for approximately two miles and is located in Hancock County, Mississippi.

The property is debt-free and lien-free. The property is zoned as a Special Use District-Waterfront Gaming District by Hancock County. On October 17, 2005, following Hurricane Katrina, Mississippi passed legislation allowing casinos to be built up to 243 metres from the mean high water line of certain bodies of water. The new law applies to the Diamondhead property.