In the 1983-84 season the Houston Rockets, sitting a respectable 24-36, lost 17 of their final 22 games, a collapse widely read around the league as a bid to finish with the league's worst record and win a coin flip for the rights to draft Hakeem Olajuwon. Under the rule then in place, the two non-playoff teams with the worst record in each conference met in a coin flip for the top two picks, so the value of losing was not just real, it was arithmetic: a team could work out in advance exactly how many additional losses moved it into the flip.
Dallas Mavericks general manager Norm Sonju, outraged that a team could simply engineer its way into a fifty-fifty shot at a franchise player, pushed the league to act. Banning tanking directly was unenforceable — nobody could prove a coach was resting a healthy player to lose — so the fix had to remove the payoff from the calculation instead of trying to police the behavior that chased it.
Replaced the coin flip with a lottery giving all seven non-playoff teams equal odds, so losing more games no longer bought better odds than just missing the playoffs.
The coin-flip gave a discrete, known probability that improved with worse records, so teams could model the payoff of each additional loss.
Equal odds across all non-playoff teams severed the link between losing more and better draft odds, removing the marginal value of extra losses.
The lottery made losing a gamble with no calculable edge, so front offices couldn't justify engineering losses.
When a reward is tied to a threshold that can be gamed by underperformance, don't police the behavior; introduce randomness to break the calculable edge.
The Knicks won the first lottery for Ewing on odds no better than the next-worst team; Stern called it the end of 'win by losing.'
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The sources
- A history of the NBA Draft Lottery and its changes over time NBA.com · nba.com
- Complete history of the NBA Draft Lottery: Four decades of tanking, the efforts to stop it and what's next CBS Sports · cbssports.com