'Budgetary support from casino revenues is phased in over time, so some variance from projections to date doesn't have a significant impact,' said Jane Ridley, senior director and sector lead for local governments at S&P Global Ratings.

'Since the city's pensions are severely underfunded, annual funding represents a large budget component and is an input to the rating,' Zachem said. 'Pension contributions represent a fixed budget obligation that must be addressed each year,' he said. But he said KBRA does consider funding of pension liabilities, among other factors, in its rating Kroll rates Chicago general obligation bonds A with a positive outlook. Harvey Zachem, managing director of public finance at Kroll Bond Rating Agency, said KBRA always expected casino revenues to be 'a relatively minor' source of funds for police and fire pensions. He added that Chicago's pension liabilities are a 'key rating challenge,' and Chicago's recent contributions above statutory requirements were a factor in Fitch's positive rating actions on the city. 'Any shortfall in casino revenues would need to be made up elsewhere, with our understanding being that Chicago plans to budget casino revenues for use in the ensuing years' budget, providing it time to make any necessary budget adjustments,' said Michael Rinaldi, head of local government ratings and lead Chicago analyst for Fitch Ratings, which rates Chicago BBB-plus with a stable outlook. That followed a pension boost for Chicago firefighters that added $180 million to unfunded liabilities. In November, the Illinois General Assembly passed a 3% annual cost of living raise for all retired Chicago police officers that added between $57 and $96 million to Chicago's pension liabilities.

The police fund is 21.5% funded and the firefighters' fund is 18.8% funded. The police fund comprised $12.73 billion of Chicago's $35.4 billion net pension liability in 2022, and the firefighters' fund accounted for $5.86 billion, according to the city's audited financial reports. That in turn is supposed to lighten the load on the city's corporate fund. The results matter because under state law, tax revenue from the casino goes to fund Chicago's police and firefighter pensions. 'Chicago is surrounded by quality casinos, so why would suburbanites drive in to play at a cramped temporary casino when they can enjoy what they're familiar with?' 'I believe the results haven't met expectations because the expectations were over the top,' said Roger Gros, publisher of Global Gaming Business magazine.

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