There are many worn-out terms that are used so often they seemingly lose all meaning. For sports bettors, "sharp money" is one of these terms and it is frequently used when breaking down line movement. At Sports Insights, we are typically focusing on large wagers made by single individuals or betting syndicates when discussing sharp money.
To understand why sharp money is important, bettors must understand how sportsbooks operate. Many bettors believe that oddsmakers are looking to balance their book by attracting 50 percent of the action on each side and thereby mitigating any risk. That is pure fiction. Sportsbooks shade their opening line to capitalize on public perception, and allow their most-respected clients to move the lines.
Although the handle increases significantly during the playoffs, sportsbooks have become progressively more reluctant to shade their opening lines or adjust based on public money in recent years. If sportsbooks believe they have an edge, they are willing to take one-sided action. We saw that play out over this past weekend with oddsmakers refusing to move the spread despite heavy action on New England, Pittsburgh and Green Bay -- all of which covered the closing spread. In fact, the line actually moved against the public in all three games. This led to a major win for public bettors and huge losses for Las Vegas sportsbooks.
For more insight into how sportsbooks shade their lines during the postseason, I reached out to Scott Cooley, an odds consultant for the offshore sportsbook Bookmaker.eu.
"We don't do a ton of shading during the playoffs," Cooley said. "Perhaps a bit during the early rounds when you've got a Miami type of team playing Pittsburgh, but as we go forth there is very little shading. And we won't adjust based on public money."