What is ‘Smart Money?’

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Derek Simon

December 21st, 2014

Several years ago, I wrote about “smart money” — the notion that a particular horse is getting pari-mutuel love from insiders or bettors in the know.

Over the years, I’ve come to affectionately refer to this group as “they,” based on interactions with racing fans I’ve known who seem convinced that “they” control nearly everything that happens at the racetrack.

“At some point before I die… I want to meet ‘they,’ I wrote in February of 2011. “You know, that band of malevolent elitists that is controlling the fate of the world and, worse, the results of horse races. Self-help guru and convicted scam artist (who’d have guessed?) Kevin Trudeau has obviously met them. He believes that ‘they’ are keeping valuable health information from us, presumably so that we will all get sick and die… and have to deal with those clowns from ‘Ghost Adventures.’

“At the racetrack, ‘they’ have been known to victimize novice and seasoned bettors alike. Laments ranging from ‘they did something to the surface to make it favor frontrunners/closers/the race winner’ to ‘they knew something about that horse’ are about as commonplace as Lindsay Lohan pledging to tell the truth, the whole truth, and nothing but the truth.

“’They’ are jerks.”

But do “they” influence the results the way some people think they do?

Well, years ago, handicapping author and professional gambler Barry Meadow thoroughly debunked the notion of “smart” money — at least as it relates to horses that are bet below their morning line odds. However, even Meadow left the door open for what he termed “mystery money,” or horses “getting hammered for no discernible reason.”

Thus, the question for handicappers is: What constitutes “mystery money” or horses “getting hammered for no discernible reason?”

In my own experience, one of the best indicators of smart money is by observing the various betting pools and looking for discrepancies. As a general rule, most veteran players and/or insiders bet to win, or “on the nose,” and shun place and especially show betting like the Kardashians shun dignity. Hence, the best tipoff that a horse is getting smart money is when it is receiving an inordinate amount of attention in the win pool.

Take, for example, Wildwoodsgreatest in the first race at Hawthorne on Dec. 20, 2014:

Now, this three-year-old son of Greatness had a lot of positives — not  the least of which was an extremely impressive last-out performance that saw him set a swift pace (-10 ESR) and still motor home late (-5 LSR) — so his 5-1 morning line odds were somewhat ridiculous.

Still, when Scott Becker trainee was bet down to 6-5, one had to wonder where the money was coming from. A quick look at the tote board suggested that more than a few wise men were eschewing incense and myrrh for a piece of the pari-mutuel pie.

Notice that while Wildwoodsgreatest controlled just 30.8 percent and 28.2 percent of the place and show pools respectively, he accounted for 34.7 percent of the win pool dollars — by far the greatest win to place/show discrepancy in the race.

As is typically the case with handicapping articles, Wildwoodsgreatest stalked the pace and won a hard-fought duel with Prince Who down the stretch to win by a half-length.