Abstract Simulation gaming has the potential to enhance the effectiveness of drought management planning. The Indianapolis water supply system is used to illustrate how. First, the probability of experiencing a severe drought in Indianapolis is examined using historical streamflow data. The effects of such a drought on the municipal water supply system are then analysed using a recently developed simulation model of the Indianapolis water system. Consideration is given to the water resource decision-making problems that might arise under drought conditions, along with a discussion of the benefits of employing simulation gaming in the analysis of these problems. A basic outline for the design of a drought management simulation exercise is presented.