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South Carolina State Lottery  

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.

 
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