If you do any research online about betting on sports, you are bound to come across two terms quite often: smart money and public money (also referred to as “dumb money”). They are fairly common terms, but until someone tells you what each of them are, you may wonder what the terms are referring to.
In the case of smart money, we are talking about the money bet on a game or event by an experienced gambler with a wealth of applicable knowledge on a particular sport/game/event. These people are referred to as “sharps.” Because of that knowledge and experience, their bets are viewed as good ones.
Their money is considered “smart” because the bet was made with knowledge and betting experience that the public does not have. Such decisions are made by professional bettors that are better at handicapping games than the average person.
Betting like the sharps and following the “smart money” is considered a sound betting strategy by many. If the educated gamblers are betting money on a team, there must be a reason. They must know something that the rest of us do not.
It is like the class genius did his/her homework, and you just copied the answers off them.
Now, public money is similar to smart money in that it is used as a means to help people decide how they want to bet. By definition, ‘public money” refers to where the amount of money the majority of people are betting.
For example, let’s say the Brooklyn Nets are a heavy favorite to win the NBA Finals and a significant portion of the wagers come in on them. In that case, the public money is on the Nets.
But why should we care?
Well, it depends on how you want to look at it and how you approach betting on sports. Let’s say you are on the fence about how you want to bet, but then you see that most people bet on one team. If so many people are betting on one team, then that must be a good bet.
So, then you do the same.
However, where this strategy is problematic is when you consider how the public makes its decision. It is not unusual for the public to make snap decisions when it bets. Rather than thinking them out, doing their homework, and making informed decisions, impulse and emotion rule the day.
Consequently, the public is often wrong — which leads to another common strategy, betting against the public. Not going with the public money is considered “fading” the public.
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