The NBA will implement a new draft lottery system intended to mitigate the risk of tanking.
The rules of the new lottery have been reported and much of the backlash revolved around how the Memphis Grizzlies have been adversely impacted by the new rules since a new restriction would be placed on the Utah Jazz 2027 selection they acquired in the Jaren Jackson Jr. trade (technically the least favorable of Cleveland/Minnesota/Utah, though Utah is widely projected to be it).
In this post, we’ll perform an analysis of the impact it has on Memphis post trade (negative or positive) and what the value of that pick should be. We’ll do this by:
- Providing breakdowns of the new lottery system, including the probabilities and expected values within the old lottery system vs. the new 3-2-1 system and of the 2027 Jazz pick heading to Memphis, comparing it in the new system vs. the old system (which it was traded under).
- Sharing the results a straw poll conducted among current and former NBA front office executives and scouts as well as multiple risk managers and sports traders within North American sportsbooks and prediction markets operators to attempt to gain a better understanding of where the Jazz are projected to finish next season as a means to assess the value of that selection/asset.
Understanding The New Lottery System
The new system comes with new probabilities distributions as well as a handful of reported parameters, including restrictions on how many drafts in a row teams can land in the top 5.
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- In the old system: only the top four picks were drawn from the lottery and 14 (non-playoff teams) were eligible. Picks 5-14 were the teams not picked and would be order by reverse standings.
- In the new 3-2-1 system: 16 teams (including two playoff teams) are eligible and all 16 slots will be drawn from the lottery.
- The bottom three teams can fall no further than the No. 12 pick.
- Accounting for the scenarios where multiple relegated teams are not selected yet as the No. 12 pick approaches, it changes the EVs of each slightly and creates a minor incentive to be the worst overall team if you are already in the relegation zone.
- Slots 4-16 can land anywhere in the new lottery.
- The bottom three teams can fall no further than the No. 12 pick.
Here are the new odds for the “3-2-1 lottery.” Too bad it wasn’t in place for the Heat’s four-year run in the play-in tournament. pic.twitter.com/iyZYBMCFSt
— Anthony Chiang (@Anthony_Chiang) May 28, 2026
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- Worth noting: the visual and stats that the NBA provided are rounded for simplicity.
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Under the new rules, teams cannot earn three straight top 5 picks from the lottery via their own selection and the streak is retroactively applied dating back to the 2025 draft.
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- In the event that a team such as the Jazz land a third consecutive top 5 pick, that pick is put in the next permissible slot, which means they would also get all of 1-5 probabilities added to the No. 6 pick.
- As a result, the highest Memphis can land with this asset is the no. 6 pick and they have an extremely increased probability of landing the No. 6 pick.
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Here an example of the full probability distribution for the Jazz pick outcomes in the new system (using the No. 10 slot example):
New Vs. Old NBA Draft Lottery Picks Expected Values By Slot
If viewing on mobile, turn phone sideways to access data.
Jazz Expectations Factor Into Memphis Pick Value
How the Jazz perform next season will likely dictate the value of the 2027 pick Memphis received via the JJJ trade.
Teams trading for future pick do evaluations on where they believe a pick is valued ahead of the trade and this is something that the Grizzlies undoubtedly performed ahead of making that trade.
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- Utah deliberately tanked over the past few seasons and have no incentive to continue to do so in 2027 with their pick rights heading to Memphis, something Memphis knew when making the trade.
- Memphis also knew that they had a record of 227-215 with Jackson in the starting lineup when the trade occurred (he went 3-1 with Utah after the transaction).
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While we suspect that Memphis expected that the Jazz will be better in 2027, the best we can do to provide any sort of empirical analysis is to gauge how the league and evaluators believe the Jazz will perform next season.
We conducted a straw poll among NBA evaluators, comprised of current and former NBA front office members and scouts as well as risk managers and traders at prominent sportsbooks/prediction markets to assist with predicting where the pick will end up in conjunction with the new lottery odds.
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- 11-of-12 evaluators had the Jazz making at least the play-in tournament. The lone evaluator who didn’t was a sportsbook risk manager.
- All nine of the current and former NBA front office members and scouts had Utah making at least the play-in tournament.
- As always with surveys, we admit it would have been beneficial to get a larger sample size.
- We also considered different biases within the survey, including harmony bias, acquiescence bias and groupthink bias. We recognize there is a chance that respondents within the NBA may not have wanted to be too critical of an opposing teams in the straw poll or have a bias of automatically speaking slightly more positive about other teams or players when talking to media members or survey takers as common practice in their profession (no Jazz or Grizzlies employee or contract workers were asked in this). While we don’t believe this is the case with everyone participating, the risk exists and is worth accounting for as a scientific measure.
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Conclusion For Memphis
Memphis gains value on this asset in the new system compared to the old one when accounting for Jazz expectations and expected pick value.
While Memphis is not eligible for a top-5 pick via their acquired Jazz selection, the expected value of the pick has increased as a result of the new lottery rules. If the Jazz were to come in under projections next season, specifically slots No. 1-9 in the pre-lottery, the Grizzlies would lose value in the asset (column 6 of the new vs. old chart above).
Given the results of the Jazz prediction survey, the expected values of the new 3-2-1 lottery slots selections and our underwriting adjustment, we place the value of the Memphis’ asset it received from the Jazz as the 2027 No. 12 overall pick.
Key Detail For Relegation Zone Teams
Memphis still has the ability to land a top-5 pick via their own selection. The team is expected to be among the contenders for this relegation zone (ie worst teams in the league). The new system would hurt Memphis, as well as all the bottom dwellers, if this proves to be the case.
Worth noting:
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- The bottom three teams do have the same number of ping pong balls as the No. 9-10 seeds but as mentioned, that does not mean they have the same odds and expected values.
- The key caveat is that the bottom three can only fall as far as No. 12.
- This creates a higher EV for them than the No. 9-10 seed teams as details.
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This also creates a potential television issues:
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- The league reportedly wants to televise the new draft lottery. This is going to create a complex situation to explain if multiple relegated teams are still without a pick as the No. 12 pick approaches. While there’s a low chance that it does occur, the league’s TV partner will need an analyst on call ready for this scenario.
- Additionally, if the league decides to change the order of the ping pong balls selected to make it more television-friendly, such as drawing the No. 16 team first instead of going from the first pick to the No. 16 pick, it will alter the odds.
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For the record, we believe the league rightfully deems that the average fans’ understanding of the new lottery system as a low priority in making changes. It would, however, deem the televised event as a higher priority and this potential issue could arise.
Additional New Rules In Lottery
(Not Currently Applicable to the Memphis-Utah situation)
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- There is also a restriction on getting the No. 1 pick in back-to-back drafts, meaning if the Wizards pick next year can not result in the No. 1 pick next year. If it comes up as the top selection, it’ll be slotted into the No. 2 slot.
- Trade rules would also be impacted. Teams would not be able to include protection in the 12-to-15 range on traded picks going forward.
- Commissioner Adam Silver “will have more power to punish tanking by altering lottery odds or changing where a team is picking.”
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Top Concern of New System
If I were a team owner, clarity on that third bullet would be my top priority ahead the vote and/or after it; and as a non-team owner, I’d love to be part of the committee that identifies tanking and polices it.
The New Draft Rules Could Be Changed After Expansion
The new set of rules contains a “sunset” clause, which allows the entire process to be revisited before the 2030 draft.
This will allow the league stakeholders to get an idea on how the changes are affecting teams. It will also allow the league to reset some things and re-allocate roster distribution after the likely expansion of one or more teams occurs.
