If this contest has been an annual thing, maybe you should run it as patrons are used to it being run. Seems it has not had an adverse effect if the show has continued.
Be clear on how judging will happen.
If you want to deter contest sharks,have a qualifying round, then a sing off, then the main event. Most sharks won't bother to travel too far if they have to show up more than once before the competition.I know, because before I started regularly gigging, I was one
to the point of paying rent off contest winnings.Sharks hate multiple qualifying rounds, and will show up the final week to qualify if there is a weekly winner, where , if there are weekly winners, then a sing off, they won't want to make three trips when there might be easier pickings elsewhere.As for gigging singers, if you keep the prize under 300, they aren;t going to bother, becaue they can make that in a gig or two without risking spending a night at a place where they might not take the prize if abigger shark swims by or the judging is done in a way that doesn't guarentee the best singer/performer winning.
You'll probably still get a few sharks, but maybe not the ones who have winning almost down to a science, so your regulars will still have a shot at winning.
I have experience as a judge as well. If you get people from bands and radio who are happy to do it for a meal/drinks, they will be the ones who will actually enjoy the show and pay attention. Anyone in need of a big bribe probably won't be as attentive, and most contestants will be satisfied with unbiased judges who are vocal coaches/performers/etc .
Edit: One more suggestion-to deter pros, have the competition on a weekend. Weeknight contests draw more pros because on weekends, many will be gigging elsewhere.
Let us know how it goes!