The implementation of a state-sponsored lottery in South Carolina
has been a hotly debated issue since it was proposed in the late 1980's.
While many states already were operating such a lottery, South Carolina
had historically resisted this trend, largely as a result of its more
conservative religious tradition. Any form of lottery was at the time
and remains unconstitutional in the state. In the context of an
increasing dissatisfaction with perceived high taxes, many citizens
saw the lottery as a solution. With advocates of a lottery pledging
the derived income to a series of worthy causes, a state lottery became
much more popular.
IMS Quantum was engaged by a citizens advocacy group to create an
Integrated Policy Planning Model that would make explicit a number of
basic assumptions concerning a state-sponsored lottery and derive a set
of plausible consequences. By developing a dollar value in each of the
areas of potential impact, a common denominator allowed the comparison
of costs and benefits in a complex public policy problem. While any model
can be designed to support either side of a policy issue, this model was
expressly designed to be a neutral arbiter.
The first part of the model explicitly showed the sales of lottery
tickets from various income classes, from the poor to the financially
secure, and levels of participation, from those who participate moderately
to compulsive gamblers. One of the strengths of the modeling process is to
make explicit those aspects of the problem that are only alluded to in
verbal arguments. As the model progressed from ticket sales to prize
generation and financial contributions to the state budget, it showed
the probabilities associated with a given payout formula and the expected
value associated with the price paid for the ticket.
The model then looked at a series of public and private sector
impacts and assigned a dollar value to the event while estimating the
number of people impacted. A total cost associated with the impact was
then computed. The objective was not to do an exhaustive study of each
of these impacts, but to depict a plausible picture and derive an
order-of-magnitude estimate. The only requirement of the modeling
approach was that the results be consistent with known data.
IMS Quantum develops Integrated Policy Planning Models that can be
used widely in any policy dispute. Each side in the argument is
encouraged to create their own areas of impact and detailed scenarios.
A test of the effectiveness of the modeling approach is the degree to
which all arguments and assumptions are exposed to focused dialogue.
In this case the model was used effectively in presentations to
legislators to clarify the issues associated with a state lottery
and show a variety of consequences.