The NBA is moving toward one of its most significant rule changes in years, not just on the court but in how teams build their futures. At the center of it is a long-standing problem known as “tanking” and a proposed solution called the “3-2-1 lottery” that would change the way young talent enters the league. According to reporting from ESPN’s Shams Charania, the league has formally presented the proposal to all 30 team general managers, with it expected to be voted on by the Board of Governors on May 28. The outline has been discussed in several meetings involving owners, officials and the competition committee, and while small adjustments are possible, the basic idea already enjoys widespread support. To understand why the league is considering such a change, it helps to start with the system that exists today, and why it has created unintended incentives.
What does “tanking” mean, and why did it become a problem
In simple terms, tanking refers to a team intentionally weakening its chances of winning games, often at the end of the season, in order to secure better draft picks for the next season. The draft is the league’s annual system for assigning new players, usually from colleges or international leagues, to NBA teams. The teams that performed worst during the regular season are given the best chance to be selected first, which matters because the top pick often brings a player who changes franchises. To prevent teams from finishing in last place and automatically receiving the first pick, the NBA uses a lottery system. It is a weighted draw that determines the order of the top picks, with worse teams getting better chances. Even with that system in place, the incentives remain clear. If finishing near the bottom improves your chances of reaching the top tier, losing games, especially late in the season, can be strategically valuable. It’s this behavior the league is now trying to discourage. NBA Commissioner Adam Silver addressed the issue directly earlier this year, saying that the current structure incentivizes teams to “do whatever they can to maximize their opportunities” in the lottery and confirming that reform is a priority. In February two teams were fined for conduct the league described as prioritizing draft position over wins, with the Indiana Pacers fined $100,000 and the Utah Jazz fined $500,000.
How does the current draft lottery work?
Under the current system, the 14 teams that miss the playoffs enter the draft lottery. Teams with the worst records are given the highest probability of securing the number one spot overall, although the chances are fractionally reduced compared to older versions of the system. The intention behind that first reform, introduced in 2019, was to reduce tanking by making the three already worst teams share the same odds. But even with that adjustment, finishing at or near the bottom still pays off. The new proposal tries to reverse this dynamic.
What changes in the “3-2-1 Lottery” offer
The proposed system introduces several linked changes, all built around the same idea: being the worst team in the league should no longer be the most advantageous situation. First, the lottery will expand from 14 teams to 16 teams. This means more teams remain in competition for top draft positions, expanding the competitive field. Second, and more importantly, the distribution of lottery odds will be reshaped. The model is called “3-2-1” because it specifies different numbers of lottery opportunities, often described as “balls” in the draw, depending on where a team finishes. Teams that finish above the lowest, particularly those ranked with the fourth-worst to tenth-worst records in the league, will have the strongest advantage. These teams will each be given three lottery balls, effectively making them the most likely group to get the number one spot. Conversely, the teams with the three worst records would move into what the proposal describes as the “relegation zone”. Those teams will only get two lottery balls, meaning their chances will actually be worse than teams that performed slightly better in the season. The message is simple. Instead of encouraging teams to lose as many games as possible, the system will reward teams that remain competitive enough to avoid finishing bottom altogether.
How will the rest of the system be structured?
The proposed “3-2-1” NBA Draft reform is designed to reduce intentional losing, or “tanking”, by changing how draft positions are awarded and how late-season situations are treated. Under the plan, all 16 teams that missed the playoffs would enter the draft lottery, rather than just the worst-performing teams with the strongest prospects.To indicate how close a team comes to making the postseason, the system ties draft lottery chances to both regular season finale and performance in the NBA Play-In Tournament. The play-in serves as a mini-postseason for the teams finishing 7th to 10th in each conference, while the teams finishing 1st to 6th automatically qualify for the playoffs.In the play-ins, teams compete for the last two playoff spots in each conference. The 7th and 8th placed teams face each other first, with the winner getting the 7th seed and a direct spot in the playoffs. The loser is not eliminated immediately but gets a second chance by playing the winner of the 9th vs 10th game. The winner of that final matchup takes the 8th and final playoff spot, while the loser is eliminated from the postseason altogether.Under the proposed reform, draft lottery odds are also used to reflect how competitive teams were in the season and how close they came to the playoffs. The 9th and 10th-place teams will receive two lottery balls as a reward for remaining competitive and reaching the play-in zone, effectively serving as a strong consolation for missing the postseason.Conversely, the 7th and 8th seeds will only receive a lottery ball if they fail to qualify through the play-ins, as they are considered the strongest of the non-playoff teams and therefore have the least need for draft assistance.The reform also reorganized late lottery selections, with selections 12, 13 and 14 effectively reserved for teams that miss the playoffs, often described as “best of the rest”. Additionally, to ensure that traded draft assets are fully respected, it bans protected picks in the 12-15 range, and introduces safeguards to prevent teams from receiving consecutive numbers. 1 selection or multiple top-five selections in consecutive years. For the bottom three teams, there is a partial safety net. Although his chances of reaching the top spot may have diminished, his draft position will not drop below No. 12.
Why does the league believe this will change behavior?
The central idea behind the reform is rooted in behavior rather than pure mathematics, as the league is deliberately trying to reduce teams’ incentives to lose, while also increasing competitiveness in the league. The team that finished bottom at the end of the season would no longer benefit from slipping further down the standings. In fact, this would be a reason to win the game and get out of the bottom three, where the lottery chances are weak. Additionally, teams outside of that bottom tier will have an incentive to continue competing, as they will now have the best chance at securing a top prospect, rather than seeing their situation worsen. As Charania explained, league officials believe the system will “incentivize winning, especially during the second half of the season,” when tanking behavior is historically most visible.
Timeline and what happens next
The proposal is not final yet. The NBA Board of Governors is expected to vote on it on May 28, and the system may still undergo minor adjustments before any formal adoption. If approved, the changes will take effect through the 2027 NBA Draft with a built-in review period. The proposal includes what is known as a sunset clause, meaning the system would run through the 2029 draft before the league decides to continue it or introduce further changes. That timeline is consistent with the current collective bargaining agreement, which runs through the 2029-30 season.
One league is trying to rebalance incentives
The NBA has adjusted its draft system before, most recently in 2019, but this proposal represents a more direct effort to reshape incentives across the league. At its core, the issue is not just competitive balance but credibility. When teams appear to profit from losing, it affects how the league is viewed by fans, players, and commercial partners. Silver acknowledged this when he described the decision as having “business implications, basketball implications, (and) integrity implications”, and said the league is committed to fixing the issue. The “3-2-1 Lottery” is the clearest indication of how far the NBA is willing to go to do this, ensuring that, over the course of a season, trying to win is once again the most rational strategy.