The NBA Draft lottery is an annual event held by the National Basketball Association (NBA), in which the teams who had missed the playoffs that year participate in a lottery process to determine the draft order in the NBA draft. The NBA Draft lottery started in 1985. In the NBA draft, the teams obtain the rights to amateur U.S. college basketball players and other eligible players, including international players. The lottery winner would get the first selection in the draft. The term "lottery pick" denotes a draft pick whose position is determined through the lottery, while the non-playoff teams involved in the process are often called "lottery teams."
Under the current rules, only the top three picks are decided by the lottery, and are chosen from the 14 teams that do not make the playoffs. The team with the worst record, or the team that holds the draft rights of the team with the worst record, has the best chance to obtain a higher draft pick. After the top three positions are selected (from the lottery slotting system), the remainder of the first-round draft order is in inverse order of the win-loss record for the remaining teams, or the teams who originally held the lottery rights if they were traded. The lottery does not determine the draft order in the subsequent rounds of the draft.
In the earlier drafts, the teams would draft in reverse order of their win-loss record. However, a special territorial-pick rule allowed a team to draft a player from its local area. If a team decided to use its territorial pick, it forfeited its first-round pick in the draft. The territorial pick rules remained until the NBA revamped the draft system in 1966.
In 1966, the NBA introduced a coin flip between the worst teams in each division to determine who would obtain the first overall draft pick. The team who lost the coin flip would get the second pick, while the rest of the first-round picks were determined in reverse order of the win-loss record. In this system, the second-worst team would never have a chance to obtain the first pick if it was in the same division as the worst team. The coin flip meant that both teams had an equal chance to draft first. The coin-flip system remained in operation until 1984.