Iris Holm: Long week — tell me this episode is going to make me feel better about institutions.
Lila Soto: Oh, it's going to make you feel something. Maybe not better. So today we're getting into tanking — deliberately losing games to land a better draft pick — and specifically why a problem the NBA tried to solve in 1985 sent Adam Silver into an emergency Board of Governors meeting in 2026.
Iris Holm: Forty-one years later. Same problem.
Lila Soto: Same problem. And the thing that started it — I mean, the image that I can't shake — is the Houston Rockets in 1984, running a 38-year-old Elvin Hayes for 53 minutes in a game. Fifty-three. Because they needed to finish with the worst record to get the Hakeem Olajuwon pick.
Iris Holm: That's not subtle. That's tanking as — what, operational doctrine?
Lila Soto: Nobody was hiding it. The Pittsburgh Penguins and New Jersey Devils that same NHL season just said it out loud — they wanted to lose to draft Mario Lemieux. Which, honestly, yeah, Lemieux. But the NBA's response was the draft lottery, 1985, equal odds for every non-playoff team. And now here's the question that I think the whole episode is really trying to sit with: if the fix was real, why is Silver still fixing it?
Iris Holm: Because the fix wasn't a fix. It redistributed the incentive.
Lila Soto: That's exactly the thread — yeah.
Iris Holm: Think of it as a raffle. You've got the worst record, so you get the most tickets. But even with the most tickets, you can still lose the raffle. That's the whole mechanism. The NBA draft lottery replaced a guarantee with a probability.
Lila Soto: And before the lottery — pure reverse-standings — the worst team got the first pick automatically. A hundred percent. Which means losing one more game was never a gamble. It was just... math.
Iris Holm: A dominant strategy. Game theory term — means the move that's correct regardless of what anyone else does. Lose more, finish worse, get the pick. No downside. The lottery broke that certainty.
Lila Soto: And the physical mechanism is actually kind of beautiful? Fourteen ping-pong balls, numbered one through fourteen. You draw four. That gives you one thousand and one possible combinations — one gets discarded, the other thousand get carved up and assigned to teams proportional to their record.
Iris Holm: So the worst team gets the most combinations — but not all of them.
Lila Soto: Right — and when the NBA shifted to weighted odds in 1990, the three worst teams each landed around fourteen percent at pick one. So you've gone from guaranteed to... fourteen percent. I mean, that's not nothing, but it's also not the same as owning the pick.
Iris Holm: Which is the question, frankly. Fourteen percent is still the highest single probability of any team in that lottery. So why wouldn't you still tank?
Lila Soto: Yeah, that's — okay, so the honest answer is: you probably still would. The weighted lottery odds affect every pick, not just pick one. Lose as many games as possible and you've improved your expected position across all of them. The incentive got blurred, not eliminated.
Iris Holm: So the perverse incentive survived the fix. It just got harder to see.
Lila Soto: The genuinely strange part is that the perverse incentive didn't just survive, it kind of... multiplied. Picture a GM in February, mid-season, sitting with a spreadsheet that shows expected draft position across picks one through five. Not just pick one. All five. And every row gets worse as wins go up.
Lila Soto: Every row. Because the weighted lottery odds apply to pick two, pick three, pick four — not just the top slot. So if you lose more games, you're not just improving your shot at one. You're compounding your expected position across the whole draft board. Roundball Reasons and NPR's Planet Money both flagged this — losing as many games as possible is still the dominant strategy for every team, because the math stacks.
Iris Holm: So the lottery was — wait, I don't want to say cosmetic, but.
Lila Soto: No — I mean, I'd push back on cosmetic. It raised the cost, it introduced real uncertainty. You might tank all season and still fall to pick four. That's not nothing. But the direction of the incentive? That never changed. Worse record, better expected outcome. That's the dominant strategy in game theory terms — it's correct regardless of what anyone else does.
Iris Holm: The magnitude changed. The direction didn't.
Lila Soto: Exactly that. And the NBA shifted to weighted odds in 1990 thinking that uncertainty would be enough of a deterrent. But if your front office is sophisticated enough to model expected draft position across five picks simultaneously — and they are, that's a Tuesday morning in every lottery team's analytics room — then the math is just... sitting there.
Iris Holm: Which is why Adam Silver is still talking about it in 2026. The 1990 fix moved the number; it didn't move the logic. And frankly — what the 2026 Board of Governors actually approved, the draft relegation piece, whether that redirects the behavior or just shuffles which losses matter — that's going to make this worse to think about, not better.
Lila Soto: Yeah. The dominant strategy problem doesn't care how you dress the lottery. And that's — oh, that's what makes the whole thing so uncomfortable to sit with.
Iris Holm: Which brings us right to 2026. The NBA Board of Governors votes, Adam Silver says he's fixing tanking 'full stop' — so what did they actually pass?
Lila Soto: The 3-2-1 system. Sixteen teams in the lottery now, not fourteen. And the big structural move — draft relegation. The three worst-record teams each lose one lottery ball. Which is — I mean, that's the first time the league has ever penalized finishing last rather than rewarding it.
Iris Holm: Wait. They take a ball away from the worst teams.
Lila Soto: Yeah. Which inverts the whole logic. But here's what actually keeps me up — okay, not literally, but. If you're a front office and you know the bottom three get penalized, where do you aim? Fourth worst. Fifth worst. You're not trying to be the worst anymore, you're trying to be bad enough without triggering the relegation penalty. Critics are already saying draft relegation just relocates tanking to teams finishing fourth through eighth worst.
Iris Holm: So the calculated mediocrity band just... widens.
Lila Soto: Spreads across more teams, yeah. And the flattening piece compounds that — narrowing odds between worst and least-bad means a team that's genuinely small-market, genuinely struggling, not gaming anything, now has a harder path to an elite pick. The team that actually needs the number one to rebuild can't count on it anymore. That cost is real.
Iris Holm: And this isn't basketball-specific. The Cubs, the Astros — MLB teams that tanked through the 2010s and built championship rosters directly from accumulated bad picks. The draft structure shapes the strategy across every league that uses one.
Lila Soto: Which means tanking isn't a character flaw in one GM's personality. It's what rational actors do when the incentive structure rewards it. Change the structure badly and you don't get honesty — you get the same calculus wearing a different jersey number.
Iris Holm: The question is whether any version of lottery reform can actually close that gap — or whether the dominant strategy just finds the new floor.
Lila Soto: That's the loop, though. Equal odds in 1985, weighted odds in 1990, draft relegation in 2026 — each one is a direct response to how teams gamed the version before it. And each one contains the next loophole. Forty years of that. I mean, the structure keeps learning, but so do the front offices.
Iris Holm: Adam Silver said 'full stop.' Forty-one years after the lottery started. The incentive didn't disappear — it just... dressed better each decade.
Lila Soto: And I keep thinking about Elvin Hayes. Fifty-three minutes. That image — that's not subtle, that's not analytics, that's just a human being run into the floor so a franchise could lose cleanly. The 2026 reform is sophisticated, it's got draft relegation and a 16-team field and competitive integrity language all over it. But underneath it, the perverse incentive is still sitting there. Restructured. Not removed.
Iris Holm: The math just learned to wear a suit.
Lila Soto: Yeah. Honest place to land, I think. Thanks for working through it.
