Several teams appeared to spend the second half of the American professional basketball season intentionally losing games to have a better chance of landing a high draft pick. New ideas propose to solve this incentive problem
By Joseph Howlett edited by Lee Billings
Cooper Flagg, the first overall pick in last year’s NBA draft, goes for a dunk. Paolo Banchero (2022 first pick) meets him at the rim.
Richard Rodriguez/Getty Images
Yesterday, the National Basketball Association (NBA) generously rewarded the Washington Wizards for the team’s losing season, the latest in a losing streak. In next month’s NBA draft, the Wizards will get the first selection among a group of young talent entering the league.
A high draft pick is among the most coveted assets in basketball, as drafting a future superstar can transform a struggling franchise into a decade-long dynasty. The draft lottery is an attempt to distribute the best places to the teams that need them most.
At the end of the regular season, the 14 teams that fail to qualify for the playoffs enter a lottery to determine the top four spots in the draft order. Ratings are awarded based on team performance during the season: the worst teams get the best ratings.
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This method aims to promote a healthy and competitive league over time. But in a way, it had the opposite effect: a number of teams spent the second half of this season in a race to the bottom, appearing to intentionally lose games to secure the best possible odds. This tactic, called “tanking,” is against league rules but very difficult to prove.
The NBA has proposed a number of solutions to the problem. On May 28, the association vote on a proposed “3-2-1” system. The name refers to the number of lottery entries, in the form of ping-pong balls, that different teams would receive, according to the plan. This would flatten the overall chances but also penalize the three teams with the worst results, making poor performance optimal but not Also seriously. But some have already pointed out the pitfalls of the system.
“Ironically, this type of format will ensure that the bottom three teams are truly the weakest,” says Justin Olmanson, a professor at the University of Nebraska-Lincoln. In this system, the worst teams are more likely to remain the worst.
Mathematicians and social scientists deal with these kinds of “incentive” problems all the time. What do they do I have to say about the new proposal?
Olmanson is the author of a working document with an alternative system that divides the worst teams into three tiers. In this arrangement, lower tiers still have a better chance of securing a top pick, but there is less difference between teams at the same tier. Although teams can still aim for a lower tier, play should be less intense from match to match, as a team’s exact place in each tier is not important.
Olmanson’s plan and the 3-2-1 proposal reveal a tension between the lottery’s two goals, both equalizing the league and discouraging tanking. “If the NBA uses the draft to contribute to long-term competitive balance in the league, there will always be tanking,” says Evan Munro, assistant professor of econometrics at the University of Chicago Booth School of Business.
In 2021, when Munro and his collaborator Martino Banchio were graduate students at Stanford University, they actually proved that this tradeoff was mathematically inevitable—that is, as long as draft positions were determined based on end-of-season statistics.
This is what leads to games in which a team is already out of the playoffs but still needs to improve its draft position. “A rational team that values draft picks a lot should try to lose in this match,” says Munro.
He and Banchoo came up with something the NBA would have considered: a deadline earlier in the season. The logic is that draft positions for next year should instead favor whoever performs the worst during this initial phase, before teams have given up on making the playoffs. Munro notes, however, that NBA officials have expressed fears that such a system could backfire: Draft-hungry teams, they fear, could start tanking early in the season to secure better chances.
Other approaches attempt to combat compensatory incentives with more sophisticated mathematics. The method used by the Women’s National Basketball Association (WNBA) bases lottery rankings on the last two seasons combined, thereby buffering winnings from any tanking.
Another approach, called Carry-Over Lottery Allocation (COLA), also combines statistics from multiple seasons, with the benefit of having bankable “lottery tickets” that teams can store and spend each draft. The worse a team performs, the more tickets it gets, but making the playoffs or getting a high draft pick requires giving up all or part of a stock.
“We applied the model to real NBA team records going back to 1999,” says La Salle University student Tannah Duncan, co-author of a book on the NBA. pre-printed paper describing the idea. “And it showed that the worst teams really would have gotten the better picks over time.”
Of course, there are those who already find the lottery system too complicated. But where math leads, teams will follow. So if the NBA wants to pursue parity without teams collapsing, it may just have to improve its math.
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