Diamond Lady Riverboat Casino: How It Ended Up in the Rough

Posted on: November 4, 2022, 12:17h. 

Last updated on: November 10, 2022, 01:53h.

A week after running our first story on the Diamond Lady, the rough sketch of the historic riverboat casino’s history can now be fleshed out, thanks to Don Sanders. He was the chief mate who helped sail the Diamond Lady from Bettendorf, Iowa down the Mississippi River to Biloxi, Miss. under Capt. Ken Murphy in August 1992.

Diamond Lady riverboat casino
The Diamond Lady was the first legal gambling vessel launched into Iowa’s portion of the Mississippi River since the 19th century. It now sits stuck in the mud where it sank in a Memphis lake last year. (Image: MSN)

“How do I feel looking at her like she is now?” Sanders said, repeating Casino.org’s question. “I’m pissed off that the Lady was neglected and betrayed and wasn’t looked over and kept afloat. I’m pissed that the selfish, greedy —holes who owned her allowed her to sink and fill with muddy river water.”

Don Sanders
Don Sanders, photographed when he captained the Players Riverboat Casino at Metropolis, Ill. (Image: Don Sanders)

The Diamond Lady helped launched modern gambling in Iowa and Mississippi, which, 30 years ago, only allowed it on water.

The riverboat, christened in Bettendorf by “Wheel of Fortune” co-host Vanna White on April 1, 1991, sank last year during a Mississippi River freeze near Memphis, where it had been stored in a marina since 2008. Now, the drought-receded Mississippi has exposed her ravaged hull.

Sanders, 81, is retired and lives with his wife near the Ohio River in Aurora, Ind.

“I’m running out of time,” he said, “And I’m pissed because I, nor anyone else, can or will do anything to bring the Diamond Lady back – just to get her afloat, cleaned up, and find a new venture for her.”

Biloxi Blues

The riverboat’s builder, Bernie Goldstein, pulled her out of Iowa after only a year because he wasn’t a fan of the state’s regulations and tax rates. Sanders said he recalls the voice of Capt. Ken during the weeklong trip downstream toward the Gulf, during which the Diamond Lady shoved a ticket barge in front of her.

Diamond Lady pushing barge
The Diamond Lady, with Sanders aboard, pushes a ticket barge down the Mississippi towards Biloxi in August 1992. (Image: Anne Zeiger Collection)

“Capt. Ken was one of the desired captains on the river,” Sanders said. “On the way down the river, he received at least 10 other offers.”

Once in Biloxi, the Diamond Lady was tied to her sister boat, the Emerald Lady, then to the ticket barge and to the dock. The conglomeration became the newly branded Isle of Capri dockside casino.

“The two boats were nosed into the shore, with the ticket barge in the middle,” Sanders recalled.

Murphy didn’t have the proper license to stay with the boat in Biloxi. According to Sanders, his license covered the Mississippi and its tributaries, but not the Mississippi Sound, where the Biloxi casino operated. So he decided to take a job opening the Players Riverboat Casino in Metropolis, Ill.

Sanders didn’t have that license, either, but he didn’t have Capt. Ken’s options. So he went to school for the license in New Orleans while a smelly fish warehouse was prepped to become the Isle of Capri’s offices. Upon his return, Sanders was named a captain of the Emerald Lady. (Each boat had four captains, who took shifts, even when the boats were docked.)

“Biloxi didn’t pay much,” Sanders said. “I had a young family who was living in Natchez, Miss., and I was commuting every two weeks. The Mississippi was like a strange land to them.”

Last Boat Leaving

When Goldstein’s company, Casino America, opened the Isle of Capri-Vicksburg on the Mississippi River 200 miles northwest of Biloxi, he asked Sanders to sail the Diamond Lady there. Goldstein had already planned to rehouse his Biloxi operations in an $18 million, a two-story barge that would open in 1994.

Sanders turned the job down. Instead, he joined his old friend, Capt. Ken, on the Players Riverboat Casino, which was closer to his home in Northern Kentucky.

“I’m lucky I didn’t go to Vicksburg,” Sanders said.

After the Diamond Lady sailed there in August 1993, she was docked with the same ticket barge, and a moat surrounded both to form the second Isle of Capri gambling operation.

“I heard that the dike around the boat sprang a leak, and the captain who went there instead of me was fired,” Sanders said.

In 1994, a larger dockside casino replaced the Diamond Lady at the Isle of Capri-Vicksburg. How she ended up in Memphis 14 years later is still currently a mystery. The Riverside Park Marina, where what’s left of the Diamond Lady rests today, did not return voicemails left by Casino.org.

“I was long gone by then,” Sanders said.

Stay tuned.