On its face, the NBA’s new lottery system seems to be capable of doing exactly what the NBA wants it to do — curb tanking.
But the unintended consequences of these new reforms will change how trades are negotiated, the value of draft picks as assets, how teams are able to rebuild and could end up angering everyone from general managers to NBA fans.
On Thursday, the NBA board of governors approved comprehensive and sweeping changes to the league’s lottery system. Say hello to the 3-2-1 lottery — so named because of how many lottery balls are up for grabs for each team.
Here’s how it works:
- Previously the lottery determined the top four picks for the draft, with picks 5-14 determined by inverse order of regular-season record. The new system expands to 16 teams and each of the top 16 picks of the draft will be determined via lottery.
- The three teams with the worst records will get two lottery balls each. 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 in the Play-In.
- Teams will no longer be able to win the No. 1 pick two years in a row with their own pick. This includes the results of the 2026 lottery, which means the Washington Wizards are not able to win the No. 1 pick in 2027.
- Teams are also not allowed to have top-5 picks for three straight years. This rule backdates to the 2025 draft. The restrictions on these picks will apply to a pick even if it is traded. So, for example, the Jazz traded a 2027 first-rounder to the Memphis Grizzlies in the Jaren Jackson Jr. deal — the most favorable of the Jazz, Cleveland Cavaliers and Minnesota Timberwolves. Since the Jazz picked 5th in 2025 and will pick 2nd in the upcoming draft, they are not allowed to have a top-5 pick in 2027, and that will apply to the pick that now belongs to Memphis, which is why the Grizzlies were the only team to vote against the new lottery reforms on Thursday.
- Previously, the second round of the draft was based on inverse order of regular-season win-loss record without being tied to lottery results. Now, picks 31 through 46 will be in inverse order of the lottery results. So, the team that wins the lottery will have the 46th pick, and the team that picks 16th in the first round will have the first pick of the second round — pick 31.
- And finally, NBA commissioner, Adam Silver has more power to punish naughty, tanking teams. He can fine a tanking team up to $10 million, reduce their lottery odds, force a team to forfeit draft picks, and change draft positions.
Here’s a nifty visual of how the new lottery odds will look:
Here’s what will change and what could change in the NBA, based on the lottery reforms:
- Teams that are truly bad, that aren’t tanking and end up at the bottom of the standings, run the risk of staying at the bottom and not being able to build their way out.
- Meanwhile, teams that are already on the rise and make the Play-In tournament, have just as much chance of winning the lottery as the worst teams in the league. Can you imagine the fury of the Wizards, Jazz or Grizzlies this year if the Warriors had won the lottery this year? In the new system, that is a much more likely scenario.
- Already, with the Memphis-Jazz example from above, we see that traded assets are already changing in value. But with the new odds, executives across the league expect that trade negotiations are going to entirely change. The new system could increase the value of picks from some teams while devaluing assets from another team.
- First-round picks from a team that is at the bottom of the standings will be seen as less valuable than those from a team a few spots higher in the standings because of the new odds, which is another way that teams at the bottom could be handcuffed in trying to rebuild.
- Because the odds are flatter across the board, the market could shift, requiring more picks in deals than we’ve seen before because teams will want more swings in the lottery. That shift could make trade season quieter with teams not willing to part with multiple assets.
- Additionally, there is a sunset clause in the new lottery system, meaning the NBA can review and make changes again after three seasons. So, there’s incentive now for teams to hold off on major wheeling and dealing until 2029 or at least not trade any picks past 2029 until they know what kind of value those picks will have.
There are probably dozens of other ways that this could go sideways or impact the way the NBA ecosystem works outside of the lottery itself. And this experiment, meant only to curb tanking, will play out over the next three years and has the potential to impact teams across the league far beyond 2029.