The National Basketball Association (NBA) has unveiled a significant new anti-tanking draft reform, dubbed the "3-2-1 lottery," to its 30 general managers. This proposal, set to commence with the 2027 draft, aims to de-incentivize losing by expanding the lottery to 16 teams, flattening odds, and introducing a relegation zone where the bottom three teams will receive fewer lottery balls for the No. 1 pick. The league office has engaged in extensive discussions with its board of governors, competition committee, and general managers, culminating in this singular proposal which awaits a final vote from owners on May 28.

The "3-2-1 lottery" system is named for the number of lottery balls allocated per team based on their final standing. Teams that fail to qualify for the playoffs or play-in tournament but manage to stay out of the bottom three relegation zone (occupying spots four through ten) will each be awarded three lottery balls. Conversely, teams finishing with one of the three worst records, designated as the relegation area, will only receive two lottery balls. However, these bottom-three teams are guaranteed a pick no lower than 12th, while other lottery teams (spots four through thirteen) could potentially fall as far as the 16th pick. Furthermore, the 9th and 10th play-in seeds in each conference will be granted two lottery balls each, and the losers of the 7-8 play-in games will receive one lottery ball apiece.

This new system represents a considerable departure from the previous lottery format, which only drew odds for teams with the bottom four records, with the remaining ten lottery teams ordered by inverse record. Under the "3-2-1 lottery" proposal, all 16 qualifying teams will participate in the drawing. Additional stipulations include prohibitions against any team winning the top pick in consecutive years or securing three consecutive top-five picks. Teams will also lose the ability to protect picks within the 12 to 15 slots moving forward.

To ensure flexibility, the proposal incorporates a sunset provision, meaning the new system will expire after the 2029 draft. This allows the board of governors to review, continue, or transition to an alternative system. The current collective bargaining agreement is valid through the 2029-2030 season. Importantly, the league will also gain expanded disciplinary authority to regulate tanking, including the option to reduce teams' lottery odds or modify their draft positions.

High-ranking NBA officials believe this 16-team reform will effectively de-incentivize losing while providing lottery opportunities for all 16 qualifying teams. It is designed to incentivize winning, particularly in the latter half of the season, as teams near the bottom three will strive to escape the relegation zone, and those above it will fight for victories to maintain their position. NBA Commissioner Adam Silver has emphasized that addressing tanking is his top priority, especially given its escalation this season due to the highly anticipated 2026 draft class and the strong incentives that previously pushed teams to maximize their lottery chances. Silver asserted in March that fixing this issue is paramount, stating, "It has business implications, has basketball implications, has integrity implications for the league. So, it's one that we take very seriously, and we are going to fix it. Full stop."