DRA pledges $590,000 toward COVID-19 relief for local organizations

The Dubuque Racing Association Board of Directors on Tuesday approved a plan that will direct nearly $600,000 to local organizations impacted by the COVID-19 pandemic.

Under the plan, $590,000 that is traditionally allocated to the DRA’s endowment fund instead will be distributed to entities that have experienced losses due to the coronavirus.

Board Chairman Gary Dolphin said he believes this is an appropriate use of funds in light of the pandemic’s continued impact.

“Some say (COVID-19) is improving, some say it is getting worse, but we know it is still very present,” he said. “We felt that is where we need to focus in the immediate future in terms of allocating dollars. We feel this is the best way to go.”

Dolphin also noted that the reallocation of these funds is contingent upon approval from the City of Dubuque, which owns Q Casino and Hotel. If the measure is approved, the DRA would work with Diamond Jo Casino, United Way of Dubuque Area Tri-States and Community Foundation of Greater Dubuque to determine the proper destination for the money.

The DRA is the nonprofit license holder for both Dubuque casinos. The board’s vote on Tuesday came after months of speculation concerning how the organization would follow through on its annual allocation of grant funding to charities.

The grants boost scores of local nonprofits annually. In May 2019, the DRA awarded $1.1 million to 129 local nonprofits.

The DRA announced this spring that there would be a delay in the allocations as Dubuque’s casinos dealt with the impacts of the pandemic.

Shortly thereafter, Dolphin emphasized that the grant program was not going away. He also said at the time that the DRA intended to allocate at least $1 million to nonprofits in 2020.

It now appears almost certain that the DRA will not meet that threshold, although officials on Tuesday said the organization soon will begin following up with the nonprofits that submitted grant applications earlier this year.

Dolphin said the DRA’s director of grants, Kathy Young, will reach out to these nonprofits to assess if and how the organizations’ needs have shifted during the pandemic.

In any year, those submitting applications for the annual grants are required to outline the need or the program that the nonprofit would support using DRA funding.

After officials reconnect with these entities, another DRA grant allocation could follow.

“After we close out the … year, we will re-evaluate where we stand as a group financially and determine if additional funds can be awarded,” he said.

While the Dubuque casinos have struggled in the face of COVID-19, grant allocations in any given year are not based on that year’s performance. Rather, the funds available to nonprofits in 2020 are based on the casino’s performance in 2019.

Earlier this year, Q Finance Director Bill Eichhorn said “net cash proceeds” from Dubuque casinos are assessed at the end of each year.

The following year, half of those profits are allocated to the City of Dubuque. The city’s portion of the previous year’s net proceeds — about $2.3 million — already was dispersed in January.

The remainder can be utilized by DRA to enrich its endowment fund, fund big-ticket community projects and provide grants to local nonprofits. However, casino officials indicated in May that available cash instead was being used for necessities such as paying bills and meeting payroll.

Amid the ongoing pandemic, the casinos are struggling to match revenue levels seen in 2019.

Gaming revenue at Diamond Jo was $4.90 million in September, down from $5.94 million in September 2019. Q had gaming revenues decline from $3.96 million in September 2019 to $3.81 million last month.

Both casinos also went through a multi-month stretch during which revenues were virtually nonexistent. They closed in mid-March and did not reopen until June 1 due to the pandemic.

Despite this decline, Q Casino General Manager Brian Rakestraw said the casino had an uptick in net income last month because of successful cost-cutting measures.

He noted, however, that the pandemic has affected casino revenue in a variety of ways.

“Our concern is not only the gaming revenue; it is also the other revenue,” he said. “We look at (hotel) rooms, food and beverage, and entertainment — we are down.”