NBA tanking – NBA lottery reforms aim to curb tanking, but researchers warn that incentives are hard to redesign without trade-offs.
In the race for the next franchise cornerstone. some teams appear to have turned the final stretch of the NBA season into a strategy game about draft odds rather than wins.. The pattern. often called “tanking. ” has become difficult to enforce against and harder to ignore—so the league is looking to mathematics and incentive design for a fix.
This season, several teams in the second half of the U.S.. professional basketball calendar reportedly managed their competitiveness to improve their chances at a top pick. with the Washington Wizards receiving the reward for a fifth consecutive losing season.. Next month’s NBA draft will hand them the first selection from a deep class. including star prospects often discussed as generational talents.. The draft’s structure is meant to reward need: teams that miss the playoffs enter a lottery for the first four draft slots. with the lowest-performing teams getting the best odds.
The idea is straightforward and long-standing.. By distributing premium picks toward clubs that struggle. the league aims to encourage long-term parity and competitive balance rather than let a handful of organizations dominate year after year.. But the same mechanism also creates a weak point.. When the path to better lottery odds can be improved by losing. a rational club can start calculating that fewer wins in the short term translate into better draft position later—an incentive that can undermine the sporting product.
Critics note that proving tanking is extremely hard.. Even when losses look suspiciously coordinated with draft incentives. teams rarely leave a clear paper trail. and the NBA’s rules offer limited leverage for determining intent.. As a result. the league can respond only indirectly. by changing the lottery’s odds so that the cost of losing rises and the benefit falls.
That response is now on the table.. On May 28. the NBA is set to vote on a proposed “3-2-1” system. a format designed to reshape how lottery entries translate into odds.. The proposal would redistribute ping-pong-ball style lottery entries among teams so the odds are flattened overall. while also penalizing the three teams with the very worst records.. In principle. it targets the extremes: make it less advantageous to be awful. while still ensuring that the worst teams remain more likely to improve through a top pick.
The trouble is that incentive systems can behave in counterintuitive ways.. Some researchers have argued that the “3-2-1” approach may still leave the worst teams with a structurally stronger claim to the top outcomes. meaning they could remain at the bottom more reliably.. In that view. the change reduces the gap at the top of the lottery distribution without necessarily removing the underlying pressure to perform poorly.
One of the central critiques comes from a professor at the University of Nebraska-Lincoln. who authored a working paper offering an alternative.. Rather than treat teams as a continuous ladder from worst to best. the proposal divides the bottom group into three tiers.. Teams in lower tiers would still receive better odds than those in higher tiers. but the odds differences within each tier would be smaller. reducing the importance of tiny end-of-season shifts.. If a team cannot meaningfully improve its rank within a tier, the day-to-day incentive to “chase” losses could weaken.
This debate highlights a tension the NBA draft system is built to manage: it must both even out competitive conditions across the league and discourage tanking behavior.. Researchers say these goals can pull against each other because draft outcomes are inherently tied to end-of-season results.. As one econometrics assistant professor at the University of Chicago Booth School of Business put it. tanking is hard to eliminate entirely if the draft is used to support long-term parity.. The reason is mathematical: when draft position is determined by season performance. teams always have some reason to lose at the margin.
That trade-off has been studied formally.. In 2021. when the Chicago scholar and a collaborator were graduate students at Stanford. they proved that the “parity versus tanking” compromise is mathematically unavoidable under the condition that draft positions are set using end-of-season statistics.. The proof matters because it suggests the NBA cannot simply tweak a distribution and expect incentives to disappear.. Even small adjustments may reduce the intensity of tanking. but complete elimination may require changing what the lottery is based on.
The incentive problem becomes especially visible late in the season.. When a team is already outside playoff contention. the usual link between wins and meaningful standings can weaken. while the draft slot can remain a lever a team can influence.. Under that setup. a rational team that places high value on draft picks has an obvious temptation: in games that no longer affect playoff lives. losing can become a path to improving next year’s roster.
To address that. the Chicago scholar and his collaborator proposed an approach the NBA has reportedly considered: move the decision point earlier with a cutoff date during the season.. The logic is to tie next year’s draft odds more strongly to performance in an earlier phase. before teams have started to abandon playoff hopes.. That could weaken late-season incentives because the lottery would already have been partially “locked in” based on earlier outcomes rather than final results.
There is, however, a catch.. The same incentive logic can shift rather than vanish.. If the league moves the cutoff earlier. draft-hungry teams might decide it is optimal to begin tanking from the beginning of the season to secure better odds during the earlier window.. The NBA’s reported concerns reflect that reality: changing when teams are measured could move the tanking behavior to a different part of the calendar.
Other leagues and proposals attempt to buffer the reward for losing by changing how many seasons’ worth of performance count toward lottery outcomes.. The women’s basketball league uses a method that bases lottery rankings on the combined record from the past two seasons. which effectively smooths the payoff.. If a team sacrifices one stretch but performs better before or after. the averaging dampens the immediate benefit of a single tanking run.
Another proposed framework, Carry-Over Lottery Allocation (COLA), also aims to spread incentives across time, but with a new mechanism.. Instead of only looking at aggregated statistics. COLA gives teams bankable lottery “tickets” they can store and spend on future drafts.. The approach allocates more tickets to teams with worse performance. while the process of making the playoffs or landing high draft picks requires giving up some or all of any stored stockpile.
To test whether that structure would actually favor the worst teams over time. a preprint paper coauthored by a student at La Salle University described model runs using real NBA records going back to 1999.. The reported finding was that the worst teams would have received the best picks over time under the proposed rules. implying that COLA could align lottery outcomes with competitive recovery goals without demanding extreme end-of-season collapses.
Still, even if the underlying math points toward better systems, adoption is never just a technical issue.. Some fans and observers say the current lottery format is already complicated. and additional layers of rules could make it harder for the public to follow.. Yet the central issue remains: if the NBA wants competitive balance without tanking. it likely must keep working through incentive design. not just adjust odds.
For now. the league’s May 28 vote on the “3-2-1” plan and the competing tier-based concept put mathematics into the spotlight in a way basketball fans may not be used to seeing.. What emerges from the research is a common theme: changing incentives is possible, but eliminating tanking entirely may not be.. If the NBA wants parity. it may have to “up the math” until the incentive to lose is no longer the simplest strategy in the final games of the season.
NBA tanking draft lottery odds incentive design econometrics sports basketball parity mathematical trade-offs