New lottery rules change tanking incentives, starting this season

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This is the latest of NBC’s NBA season preview stories, and we will post at least one a day on these pages until Oct. 16, when the NBA season kicks off. We will look at teams and topics around the NBA throughout the series, and today we focus on the impact of the new lottery odds.

To paraphrase Jerry Tarkanian, the NBA is so mad at the 76ers, it’ll keep the Hawks losing another couple years.

The NBA finally enacted lottery reform that will take effect this season. The measures appeared designed to curb Sam Hinkie’s ambitious multi-year tank, but Philadelphia has already reaped the rewards of The Process. The 76ers, led by former high draft picks Joel Embiid and Ben Simmons, are one of the league’s top teams and extremely unlikely to land in the lottery. It’s the next generation of losing teams, like Atlanta, that will feel the brunt of these changes.

Generally, the new rules reduce incentives to chase the league’s worst record. The very-bottom teams face greater variance and worse expected outcomes than previously. The top six seeds in the lottery became less valuable than before, the 7-14 seeds more valuable than before.

In the previous system, the three worst teams had 250, 199 and 156 of 1,000 lottery combinations. The top three picks were drawn then the next 11 picks were slotted in reverse order of record.

Now, the three worst teams each have 140 of 1,000 lottery combinations. The top-four picks are drawn then the next 10 picks are slotted in reverse order of record.

There are several ways to measure the changes, but here a few based on lottery seed in the old system (orange) and new system (blue):

Odds of No. 1 pick:

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Odds of top-four pick:

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Expected pick:

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The “big” change is the bottom three teams all have the same odds of getting drawn, creating an illusion there’s no difference between finishing last or third-to-last. But the last-place team still gets slotted ahead of the second-worst and third-worst (and second-worst ahead of third-worst) if none get drawn in the lottery.

Simply, teams are still incentivized to chase the league’s very worst record. The incentives aren’t as strong as they once were, but they still exist.

And the upside remains just as high. Top draft picks are so valuable – a chance to add elite young talent on a relatively cheap contract that comes with five years of team control that, practically, extends much longer.

So, how will teams handle this changing structure?

Decisions will be fascinating among more than just the lowest of cellar-dwellers. Several teams have traded first-round picks this season that contain protections within the lottery. The Mavericks owe the Hawks a top-five protected first-rounder. The Cavaliers owe the Hawks a top-10-protected first-rounder. The Grizzlies owe the Celtics a top-eight-protected first-rounder. The Nuggets owe the Nets a top-12-protected first-rounder. Those owing teams all face a new batch of decisions of when to give up on trying to make the playoffs and aim to keep that pick.

I mostly share the view that lottery reform won’t change much, particularly on a year-to-year basis. But the cumulative effect could be larger on some teams.

Hinkie’s 76ers were an anomaly. Few teams set out to tank for that long. Many more tanked for a season, knowing that would result in a high draft pick. With a new touted prospect in hand, those teams usually attempted to ascend.

But now, far less is guaranteed. Before, the second-worst team was likely to land a top-three pick and was guaranteed a top-five pick. Now, the second-worst team is likely to pick between No. 4 and No. 6. In that lower range, the team might get stuck with a lesser prospect who leaves it stuck losing again the following year.

At minimum, lottery reform adds uncertainty to a league that had grown familiar with the previous system and how teams proceeded within it. We can all guess how teams will act in the new system, but this season will provide much more tangible clarity.