The NBA’s big tanking fix is in place.
The league’s board of governors approved a comprehensive reconfiguration of its draft lottery rules by a remote vote Thursday, according to two sources briefed on the vote and later confirmed by an NBA news release. The NBA will replace its previous draft lottery system, which gave the worst teams in the league the best chance at getting a high lottery pick, with a new format that tries to divorce team performance from lottery luck.
The new design — called the 3-2-1 system around the league — will divide 37 lottery balls between 16 teams; the worst three teams will only get two ping pong balls each in the drawing, the teams with the seven next worst records will each get three, the four teams that finished 9th and 10th in the Play-In Tournament will get two balls each, and one ball will go to each of the losers of the 7-8 matchup. The first 16 picks of the second round will be made in reverse order of the first round.
The new rules passed 29-1, with the Memphis Grizzlies as the lone “no” vote. The Utah Jazz are the only team that earned top-5 picks in each of the last two lotteries, but the Grizzlies own Utah’s 2027 first-round pick as part of the Jaren Jackson Jr. trade this February. The Grizzlies’ return in the trade will be capped at the No. 6 pick next season because the new rules say that even though the Jazz no longer control their pick, the restrictions still apply for the team that traded for it.
The league hopes that this will stop teams from losing intentionally to maximize their odds of landing a high lottery pick. Under the old system, which was in effect through the lottery earlier this month, the three worst teams had a 14 percent shot each at landing the No. 1 pick. Under the new rules, they’ll each have a 5.4 percent chance. The seven teams with three ping pong balls each will have an 8.1 percent chance at the top pick.
The new system will sun set after the 2029 NBA Draft, at which point the governors will need to vote to either continue it or transition to a new system.
“We have to fix incentives, so teams aren’t out there with an incentive to be bad,” NBA commissioner Adam Silver said Wednesday on “The Pat McAfee Show.” “It’s the No. 1 issue for our fans right now. Nobody wants to see that. It completely obviously goes away once we get to the playoffs, but we just got to fix that problem.”
Some NBA team executives have said the new system will trade off one set of problems for another. Some of the executives canvassed by The Athletic this month believe the league is overcorrecting, while others think the new rules will make it harder for the league’s worst teams to escape the bottom of the standings.
Others pointed out that the incoming format will impact already made trades centered around draft picks, as the value of those picks has changed.
Silver admitted Wednesday that “some people think it may even be a bit of an overcorrection.” But he believes it is a necessary step for a league that has changed the lottery rules numerous times since it was instituted in 1985.
“You need incentives to perform,” Silver said. “I mean, we’re actually calling the system for the three worst records are going to have slightly worse odds than they would have otherwise had. And we’re stealing a term from soccer, which is relegation, and there is a notion that possibly there should be a penalty for performing poorly. I mean, in real relegation, you’re actually out of the major league. Here, if you’re the worst-performing team in the NBA, you still get your same economic share of national and global television revenue.
“You still get your same share of national and global merchandising revenue. And I think at the end of the day, you want the greatest incentive to be successful, so those teams still have very good chances to get a top draft pick, but I’ll just also add that’s not the only way to build a team.”
The new system ratified by team owners includes other changes. Silver will now be able to fine a recalcitrant tanking team up to $10 million, reduce a team’s lottery odds or force them to forfeit or transfer draft picks, and change draft positions or suspend team officials.
Teams will no longer be able to win the No. 1 pick two years in a row with their own pick, backdated to the 2026 draft. Teams will also not be able to select in the top-5 of the lottery in three straight years, backdated to the 2025 draft. The restrictions on these picks would apply to that team’s draft pick and still apply even if that pick will be traded. That means the Washington Wizards will not be able to win the lottery next year, and the Memphis Grizzlies cannot have a top-5 pick next season with the pick they own from the Utah Jazz through the Jaren Jackson Jr. trade because the Jazz drafted fifth in 2025 and will pick second next month.
