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DIAMONDHEAD, MS-Diamondhead Casino Corp. has signed a non-binding letter of intent with Casinos Austria International Holding GMBH to form a joint venture to develop a destination casino on 50 of its 404 acres. There are no deadlines embedded into the pact to finalize the deal or break ground.

If the deal is finalized, the JV’s project would be the first on the 404-acre waterfront tract, which is owned by Diamondhead Casino’s wholly owned subsidiary, Mississippi Gaming Corp. The development land, situated in Hancock County on the Bay of St. Louis, had been the center of talks with New York City-based Trump Entertainment Resorts Inc. until early 2007 when the $300-million project cratered.

Gregory Harrison, vice president of Madiera Beach, FL-based Diamondhead Casino Corp. says not only does the agreement need to be formalized, but the JV also needs to firm up the casino’s size and the location. He tells GlobeSt.com that he has no doubt that a deal will be struck because both companies have long-term ties. “They loaned us the money to buy the land in 1992 and operated two of our boats in Florida, when we operated under the name Europa Cruises,” he says.

The Diamondhead tract has two miles of frontage along Interstate 10 and about the same amount on the Bay of St. Louis. The site is zoned as a special use district for waterfront gaming. It also is subject to post-Katrina legislation allowing casinos to be built up to 800 feet of the mean high-water line.

The landowner has had a couple of nibbles from interested parties since Hurricane Katrina in 2005. In late 2006, the company was negotiating with New York City-based Trump Entertainment Resorts Inc., but talks broke off in early 2007. Last summer, the company rejected an offer to acquire the entire site for $100 million.

“We’re not interested in the land. We want a joint venture relationship. We want to share the revenue stream,” Harrison stresses.

Casinos Austria Group operates casinos in 18 countries and on board international cruise ships. Harrison says the company, which already has operations in Colorado, is interested in broadening its US footprint. “This joint venture is very good news,” he adds.” They’re an excellent company and I’m thrilled for all of our shareholders.”

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