Welcome the other child to play basketball too (to be kind) and if he declines (which it sounds like he will) have your son simply say, "Well just let us know if you change your mind. I am practicing so I can make the school team." If the other kid keeps interrupting just keep repeating "sorry, I'm practicing now. Are you sure you don't want to play?" By now the kid knows that continually asking will get the desired result. It's like sleep-training - repeat, repeat, repeat and don't give in! If the boys like to play, be sure that your son presents other opportunities by going outside for other things or going over to ask the other boy to come out.

As long as the neighbor kid can see your son playing, he'll probably want to come over.

It still sounds like it would be awkward even if the kid is invited to wait. Try finding a park or school basketball court to practice at as an alternative. Sometimes parents just want to have family time with their kid whether it's an indoor activity or outdoors. Every kid activity does not need to involve neighbors.

I feel badly for the kid who keeps coming over, but I am not liking these answers where the mom conscripts her son to playing later with the kid who doesn't play basketball.

What does your son want to do? Does he want to play basketball with you or does he want to go run off with the neighbor? And if he'd rather go play with the neighbor, is that okay with you?

He likes playing with the neighbor, and they do play together sometimes, which is totally fine by me. But it doesn't seem fair that we can never play basketball, which is why I want to tell this kid that he can't insist that DS do something else every time we are doing so. DS is happy to either play basketball or hang out with the kid in the moment, but he wants to get better at basketball, and if we never play, that's unlikely to happen. I'll start suggesting that the kid come back in 20 minutes if he doesn't want to play, or sit quietly and watch for 20 minutes.

What does your son want to do? Does he want to play basketball with you or does he want to go run off with the neighbor? And if he'd rather go play with the neighbor, is that okay with you?

Working out what you and your son want ahead of time is key to deciding how to approach the neighbor.

OP, age 7 is not too young to teach him some social skills on how to negotiate with peers. You should teach your son to say, let's play bball for a while, and then we can do xyz. Also, maybe your son can reciprocate initiating playdates with the neighborhood boy. As a mother of two older boys (9 & 12) who lives in a neighborhood full of other boys, you will really appreciate encouraging this friendship. Get them started off on the right foot now, and when they get to be older, they can start playing more independently from their parents.