Mississippi Historic Riverboat Casino’s Sunken Shell Exposed by Drought

Posted on: October 28, 2022, 04:36h. 

Last updated on: May 19, 2023, 02:51h.

An updated story about the Diamond Lady appears  here.

The drought-receded Mississippi River has exposed an historic riverboat casino. The Diamond Lady officially launched modern gambling in not one, but two US cities after it first set sail 31 years ago. It sank last year during a freeze in the Mississippi River near Memphis, where it had been stored since 2008.

Diamond Lady Riverboat Casino
The Diamond Lady riverboat casino launched riverboat gaming in Iowa and Mississippi before being abandoned near Memphis in 2008. After sinking last year, historically low Mississippi River water levels have exposed her. (Image: fox13memphis.com)

The Diamond Lady, built by scrap-metal magnate Bernie Goldstein, was the first legal gambling boat launched into Iowa’s portion of the Mississippi River since the 19th century. A replica of the old paddlewheel boats that once regularly cruised the waterway, it featured multiple decks with slot machines dinging on each floor and low ceilings you could reach up and touch.

Iowa’s Boat Comes In

Three thousand excited people lined the dock in Bettendorf, Ia., on April 1, 1991, to watch Vanna White christen its first excursion. The riverboat took four trips that day, including a dinner cruise that cost $37.95.

The guests couldn’t keep boarding fast enough – more than half a million during the Diamond Lady’s first year of operation. Riverboat gambling, legalized by Iowa in July 1989, gave the state a needed jolt after the farm implementation industry crisis of the 1980s.

But gaming regulations required scheduled, four-hour cruise times, $200 spending limits, and no more than $5 bets. Also, only 30% of a boat’s space could be devoted to gambling. According to Goldstein, these regulations cost him millions in his first year of operation.


Diamond Lady
The Diamond Lady takes her maiden voyage on April 1, 1991. (Image: qctimes.com)

In 1992, Goldstein announced plans to move the Diamond Lady south on the river to Biloxi, Mississippi, whose regulations and tax rates were more to his liking. After the Diamond Lady’s last cruise on July 5 of that year, she and her sister ship, the Emerald Lady, sailed to Biloxi’s eastern tip. Here, Goldstein tied them permanently together and to a dock. That created the Isle of Capri, Mississippi’s first dockside casino.

The Isle of Capri – the first gaming establishment to trade on the NASDAQ – began Biloxi’s transformation from a sleepy former seafood capital of the world to a major southern gaming destination.

But the former Diamond Lady and Emerald Lady were replaced, in 1994, by a two-level, $18 million barge. In either 2002 or 2003, the Diamond Lady and her landing barge were moved to McKellar Lake’s Cummings Marine facility, owned by George Cummings. They were tied up there with Goldstein’s President Riverboat Casino, which he moved to Woodriver, Ill. a few years later.

Goldstein died in Bettendorf in 2009 at age 80.

Diamond in the Rough

The Diamond Lady is now among several sunken boats stuck in McKellar Lake’s mud as the Mississippi reaches record-low water levels. Where the ship is stranded, the water is currently 10.71 feet below the historical average. That breaks a level of 10.70 below average set back in 1954, according to the National Weather Service. Water levels are at or below the low-water threshold along a nearly 400-mile stretch of the river.

More than a third of the rain in the US ends up in the Mississippi River system. However, with little or no rainfall coming from the Midwest, the river is drying up.