Bettors hear the term ‘sharp money’ all the time in sports betting discussion. They lean on the phrase as a crutch for validating analysis without knowing the who, where, when, what and how it impacts the betting markets. They’re smart to recognize its importance; sharp money is the lifeblood of the entire betting industry.
Sharp money is not only important for bettors to understand but it also serves as an invaluable tool for bookmakers when building markets for maximized revenues. Balanced books are the biggest myth in all of sports betting. Yes, in a perfect world oddsmakers could create point spreads that drove perfectly balanced action with infinite volume allowing them to just collect juice while yielding massive profits. In reality this couldn’t be further from how the machinery of a successful sportsbook works. Sharp money shapes, molds, and creates the betting market for top tier bookmakers allowing them to steer money onto a desired side. Once the house understands the buy point for professionals they respect they can let the market sit at a particular price creating the kind of liability and risk they’re comfortable embracing.
Last weekend provided a perfect example of a game where bookmakers stood their ground with no desire to attract equal action. Betonline said the handle on the Patriots vs. Bills game was the largest of the entire season, creating massive liabilities for the house with one-sided Patriots action. Recreational bettors bought into the narrative that New England would do everything in their power to make a statement (who could blame them given what we’d seen from the Patriots this season) while professionals stuck to their guns looking to trust their numbers indicating an inflated price tag. Most shops here in Vegas reported 85% of tickets (or higher) being printed on the road favorite Patriots knowingly placing the house in a precarious position. Now, I know what you’re thinking: “If the professionals are betting the dog, shouldn’t the larger bets effectively balance out the sheer volume of wagers from the recreational bettor meaning the house actually needs New England?” It’s a great question and entirely fair to ask, here’s why that wasn’t the case.
A sharp bettor isn’t always defined by the size of his wager. There are plenty of instances where a known pro will bet a game for a fraction of the counter limits, yet the book values his or her particular opinion enough to adjust their numbers. This is the cat and mouse game that goes on every day; books attempting to identify advantage players they can use to the house’s advantage. When bookmakers profile their customers correctly they’ll feel comfortable drawing a line in the sand inviting recreational bettors of the $5 or $5,000 (casino player) variety to fire at the appropriate price. Books align their financial security with players known to have a long term edge given their precise approach. The problem that can arise when it comes to public sides all-winning on the same day is parlay and teaser liability. Always remember the most a sportsbook can win off a $10 3-team parlay is $10 bucks, while the player takes home nearly $60. No one feels sorry for the books knowing the hold on parlays far exceeds straight bets, but on days when the perfect storm hits the end result is a blood bath.
This importance of sharp money feeds into another industry buzz concept known as “reverse line movement.” This concept is straight forward; the line moves against bet count indicating sharp money is diametrically opposed to public sentiment. While it’s great to recognize these trends in the market, understand that sharp money isn’t always right or going to win 100% of the time. That’s another myth about sports betting that needs to be squashed immediately. Those thinking professionals win an obscene amount of their bets are sorely mistaken. Everyone aspires to win 100% of their wagers but when you consider the break even threshold for sports bettors is 52.38% (assumes 11-10 odds) hitting a “mere” 55% becomes profitable with anything above that beyond profitable.
Just remember the next time you hear the term ‘sharp money’ thrown around it’s not a guarantee a bet will win. It’s also not a guarantee the person doing the throwing knows the intent of the bet, either. Guys mention it all the time, but if simply identifying its existence meant a 90% success rate; there would not be a Bet the Board. We would all just follow the rainbow to the pot of gold. Most books (not all) hold advantaged players to lower limits, meaning they find themselves rooting for the Pros instead of the Joes when it comes to the largest NFL decisions. The public may not have a lot of say in moving lines each week in every sport, but they definitely have the power to decide if it’s house or player claiming victory on any given Sunday.
