Sharp Money

What is Sharp Money?

Sharp money refers to wagers placed by "sharps," who are professional, highly skilled, and respected sports bettors. These individuals or syndicates have a long-term, proven track record of winning. Unlike the "public" or "square" bettors, who may bet based on emotion, team loyalty, or media hype, sharps rely on sophisticated statistical analysis, proprietary models, and deep industry knowledge to identify value in the betting market. Sportsbooks pay close attention to where sharp money is going, as it signals a well-informed opinion and can significantly impact the betting lines.

How It Works

When a sharp places a substantial bet, sportsbooks take notice. This influx of "smart money" on one side of a game often causes the sportsbook to adjust the odds or point spread to balance their action and reduce their liability. If a book takes too many large bets from sharps on one side and that side wins, the book stands to lose a significant amount of money. Therefore, the movement of sharp money is a key indicator that the original line may have been inaccurate or that there's a valuable betting opportunity.

Other sportsbooks will often follow the line movements of the market-making sportsbooks that cater to sharps. This creates a ripple effect across the industry, where a single large bet from a respected source can shift the entire market. For the average bettor, tracking sharp money can be a useful tool. It provides a glimpse into what the most successful bettors are thinking and can help identify bets with a positive expected value (+EV).

There are several ways to identify sharp money action:

• Reverse Line Movement: This is the most common indicator. It occurs when the betting line moves in the opposite direction of the public betting percentages. For example, if 80% of the public is betting on Team A, but the line moves in favor of Team B, this is a strong sign that sharp money is on Team B.
• Steam Moves: A steam move is a sudden, drastic, and uniform line movement across the entire sports betting market. This happens when a large amount of money is bet on one side of a game at multiple sportsbooks simultaneously, often by a betting syndicate.
• Betting Volume vs. Money Percentage: Many sportsbooks provide data on the percentage of bets and the percentage of money wagered on each side of a game. A significant discrepancy between these two percentages can indicate sharp action. For instance, if 30% of the bets are on Team A, but 70% of the money is on them, it suggests that larger, sharper bets are being placed on Team A.

Example of Sharp Money

Let's consider an NFL game between the Kansas City Chiefs and the Denver Broncos. The Chiefs open as 7-point favorites. Early in the week, 75% of the betting public is backing the Chiefs, expecting them to cover the spread easily. However, instead of the line moving to -7.5 or -8 to encourage more betting on the Broncos, it drops to -6.5. This is a classic case of reverse line movement.

This movement indicates that a significant amount of money from sharp bettors has come in on the Broncos +7. The sportsbooks respect this action enough to move the line, even though the majority of individual bets are on the Chiefs. The sharps may have identified an overreaction to the Chiefs' recent performance or a key injury that the public is overlooking. Bettors who track this movement might then decide to also bet on the Broncos at +6.5, following the lead of the sharp money.

Why It Matters

Understanding and identifying sharp money is crucial for anyone serious about sports betting. It provides a powerful signal that can help you make more informed decisions. While blindly following sharp money isn't a foolproof strategy, it can be a valuable component of a comprehensive betting approach. By paying attention to where the smart money is flowing, you can gain a better understanding of market dynamics and potentially find an edge against the sportsbooks.

For sportsbooks, tracking sharp money is essential for risk management. By adjusting their lines in response to sharp action, they can avoid large losses and maintain a balanced book. In essence, sharps help to shape the market and create more accurate betting lines. Their influence is a testament to their skill and the respect they command in the gambling world.