NHL’s draft lottery seems to help fight tanking

The season is approaching the three quarter mark, and two races are in full flight: the race to secure a playoff seed, and the race to secure a high draft pick. For fans of those teams clearly out of the former, losses are cheered perhaps more than wins as tanking is seen as the best route for the future.

Tanking, or intentionally trying to lose games, is something the league is naturally very concerned about. As such, the NHL followed the NBA’s lead and implemented a draft lottery starting in 1995. The idea behind a draft lottery is that teams will have less incentive to tank if they are not guaranteed the first overall pick by being the worst team in the league that year. The question is, has it worked?

Given that tanking entails trying to amass as few points as possible, there should be a relationship between the incentive to tank and how many points that last place team accumulates in a given season. Specifically, if the lottery has reduced the incentive to tank, last place teams should be accumulating more points, on average, since the introduction of the lottery.

Unfortunately, there are several other factors that also affect how many points the last team has. First, and perhaps most obvious, teams haven’t played the same number of games every season. This discrepancy is easily adjusted for by considering the number of points per game the last place team collects. So, for example, based on the current 82-game season, the Florida Panthers’ 36 points in 48 games during the 2012-13 season would be equivalent to 61.5 points.

Related, but not so easy to account for, is the fact that the average number of points handed out in a game is no longer constant thanks to the extra point handed out for overtime and shootout losses. In order to deal with this, we considered the last place team’s points per game divided by the average number of points awarded per game that season. Prior to the so-called “Bettman point”, this was one (2 points per game for 2 teams). Since the Bettman point was introduced in 1999-2000, this has bounced around a bit but after the introduction of the salary cap in 2005, it has generally been close to 1.1.

Finally, there are a couple of factors that can influence how good (or bad) the last place team is in a given season. As we discussed a couple of months ago, the salary cap (and accompanying salary floor) has promoted parity, which means that we should expect last place teams to be better (all else being equal) since the cap’s introduction. Moreover, during the league’s gradual expansion to 30 teams, franchises in the early years of their existence didn’t have much time to accumulate talent and so should naturally be expected to be worse.

The salary cap has existed only after the lottery was put in place, and most expansion took place before the lottery was implemented, so these are both factors that could make the lottery look like it’s having a bigger effect than it actually is.

So after taking all these factors into consideration, what effect has the lottery system had? What we found is that today’s teams are 5 to 6 points better over an 82 game season, on average, than they would have been without the lottery system in place. That is, if we were to consider a hypothetical world in which the NHL operated as it currently does with a salary cap, the Bettman point, no recent expansion teams, but without a lottery system for the draft, we would generally expect the team that came in last place to average 55 to 56 points instead of the 61 points that they currently get. Thus the lottery has increased the last place team’s points by about 10%.

As of writing, the Buffalo Sabres are on pace for just over 52 points. Whether the Sabres are intentionally tanking or just epically bad is anyone’s guess. But what can be said for sure is that even though much in the game of hockey is changing, tanking can still be done the old fashioned way.