Identifying Sharp Money When Betting on the NFL

When it comes to wagering on any sport, bettors always want to know where the sharp or smart money is going. For years we have preached the value of betting against the public, and it has been incredibly profitable — just take a look at our vaunted 80/20 betting system. Square bettors love to pound the favorite while sharp bettors would simply wait for bookmakers to adjust their odds before taking the underdog at an artificially inflated price.

However, betting against the public is only one piece of the puzzle. These days, wise guys and betting syndicates spend years developing NFL betting systems based on advanced metrics and it’s these sharp bettors that move lines. But how do we identify where this smart money is going?

Over the years, reverse line movement has been one of the best sharp money indicators in the NFL. Reverse-line movement refers to betting line movement that contradicts the public betting percentages. For example, if the Patriots are receiving 80% of spread bets as a 14-point favorite against the Dolphins, you would expect the line to move to -14.5 or -15. If the line drops (to say, -13.5) it is a sure sign that smart money, or large wagers made by single individuals or betting syndicates, has come in on the Dolphins. You would immediately want to search for a sportsbook offering Miami +14 and quickly get down.

This method has been enormously successful over the years and is the backbone of our NFL smart money betting system.

Using our BetLabs software, we decided to look at the success of this reverse line movement using historical data dating back to 2003. We first used our spread percentage filter to look at a very basic contrarian strategy — specifically teams receiving less than 40% of spread bets. We then used our “spread change from open to close” filter to look at instances where a team became a bigger favorite or a smaller underdog, thus moving against the public betting percentages.

Even with such a simple filter, we saw that teams fitting these two criteria posted a record of 290-249 ATS with 25.82 units earned and a 4.8% return on investment (ROI). Over the past two seasons this system has been particularly profitable with a 75-57 record and an impressive 13.9% ROI.

But, it was when we focused on conference games that we saw the largest jump with a 225-183 record, +30.16 units won and a 7.4% ROI.

NFL-Smart-Money-BetLabs

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Identifying smart money is certainly one important aspect of being a sharp NFL bettor, but it’s only one piece of the puzzle. We would highly recommend visiting our Sports Betting Academy for more valuable sports betting tips and pointers.

The NFL season is still months away, but many sportsbooks have already posted their Week 1 lines which can be found on our NFL betting trends page. The New York Jets opened as 2.5 point underdogs and are receiving just 23% of spread bets, yet the line has dropped to +1, indicating early sharp money on this home dog. For that reason, we will continue to monitor this game as a potential best bet.

Do you have any questions for the team at Sports Insights? Are there any week 1 line moves that have intrigued you? Make sure to leave your thoughts in the comment section below.

27 comments on “Identifying Sharp Money When Betting on the NFL
  1. Totally understand how this works and why you want to know where the sharp money is. However, how do I know ? When I look at a line and whether its moving one way or another, I still dont know the percentages of what side the public is on and what side the sharps are on ?

  2. I agree that identifying smart money moves is important.

    290-249 is 21 units earned, no? And then you have to subtract the 5-10% juice.

    How do you calculate ROI?

    Thanks!

  3. PJ – but how does the information you receive from sportsbooks allow you to track who the public is betting on…? In other words, how do the sportsbooks distinguish a ‘sharp’ from a ‘public square’? (And wouldn’t each sportsbook have it’s own way of doing that..?)

    • We combine our public betting percentages with line movement to determine where the sharp money is falling. Using the example in the article, let’s assume the Patriots are 14-point favorites over the Dolphins and are receiving 80% of spread bets. Normally, you’d expect that line to increase to -14.5 or -15 with so much action taking the Patriots as sportsbooks want to encourage more Dolphins money to balance their books.

      However, if that line drops to -13.5 instead, that means there is actually more money (or more respected money) represented in the 20% of spread bets taking the Dolphins, forcing the books to move to -13.5 to actually encourage more bettors to take the Patriots, even though they’re already receiving 80% of spread bets.

      • Appreciate the quick reply, PJ! I’m still struggling a bit to understand though… I asked how do you know where the public and squares are betting, and you replied that you combine the public betting percentages with line movement…

        My question is about the step before that… how do you even know which bets are ‘public’ and which bets are ‘sharps’… (perhaps the Books tell you, but HOW do they know which is which?)

        Alternatively, are the books giving you a breakdown of ‘sharp’ vs ‘public’… or are you assuming all info from the Books is ‘public’ and using your algorithms on how lines move to then determine sharps? Something else?

        • You don’t know which bet is square and which is sharp on a per bet level. Sportsbooks simply give us the percentage of the number of tickets on each side.

          But we combine those with line movement to determine sharp vs. square. For instance, if the Patriots are getting 80% of bets at -14 and then line moves to -14.5, it’s safe to assume that a bunch of squares are on New England. If the line goes from -14 to -17, then you can assume both square and sharps are on New England.

          But if the line drops to -13.5, then it’s safe to say the sharps like Miami.

          There is no single, magic stat that tells you which individual bets are square and which are sharp. But by combining a handful of tools, you can determine which side the sharps are on for a handful of games each week.

          • Very helpful insights, PJ!

            A few more clarifying questions: When you say “Sportsbooks simply give us the percentage of the number of tickets on each side.” does that mean a) 40% on the Pats at -14 and therefore obviously 60% on the Pats’ opponent at +14… or b) of the 40% of the bets on the Pats at -14, 80% are public and 20% are sharps? (If ‘b’, how do the SportsBooks themselves know which bets to group into which bucket?)

            Next question: In your example about the Pats line being -14 and then moving to -13.5, you say it’s safe to assume the ‘sharps’ like Miami. Why is that a safe assumption? Wouldn’t a sizeable ‘public’ bet cause the same move? For instance, Joe Golucky could be at a bachelor party in Vegas and plunk down 10k on the Fins.. right?
            — so how do you know the ‘sharps’ are moving the line, as opposed to just last-minute ‘public’ bets?

          • Question 1: A) On our Live Odds page, we post the spread, moneyline, over/under and parlay/teaser betting percentages for each team/game. So right now, we have 56% in the spread % column for Baltimore and 44% for Denver (for the Thursday night kickoff game this season), so you know exactly where the action is coming in on each game.

            Question 2: Most oddsmakers won’t move the line for one large, public bet. A square is a square to them, no matter the amount of money. Oddsmakers are more willing to move the line on a $5000 bet from a sharp bettor than they would for a $25000 bet from a square.

  4. When you post the percentage of bets on the game is it total number of bets or total dollar amount bet on the games? Seems to me the best percentage would come from games which might have 70-80% of the total bets placed on one side but have 70-80% of the money being bet on the other side. The ole want to fade the $100 players and side with the five dime guys.

    • Hi Frank, our betting percentages represent the total number of bets, not actual dollars on each side. We’d love the get that data, but sportsbooks are unwilling to provide it.

      But in essence, this article explains how we combine betting percentages and line movement to determine where the big money is falling in these games.

  5. PJ – thanks again – this is so insightful!

    When you say “Oddsmakers are more willing to move the line on a $5000 bet from a sharp bettor than they would for a $25000 bet from a square.” do you have any knowledge on how the books themselves distinguish between ‘public’ and ‘sharp’? (Are the ‘sharps’ relatively famous and they books somehow know them already? Or is it more systematic, where a particular person has a “better than normal” winning percentage and therefore gets identified as a ‘sharp’?)

    Also, it sounds like ‘sharps’ don’t want to be identified as ‘sharps’ as it could hamper their betting ability (lines would move, etc.)… I wonder to what extent ‘sharps’ would have people (runners?) placing bets on their behalf to throw off the appearance of being a ‘sharp’… sounds like a good movie in the making!

    • Sportsbooks keep extensive records on the bettors who play there, so they know everything about players making big wagers. If a bettor wins consistently, they’ll get their limits lowered significantly and the book may even refuse to take their action.

      And you’re 100% correct, sharp bettors want to remain as low key as possible.

      I’d highly recommend reading a book called, “The Smart Money” by Michael Konik. He worked for one of the most successful betting syndicates in Vegas and goes into detail about the difficulties sharps go through in order to get down and how they have to stay out in front of the sportsbooks.

      • You just made my day! I’ve been asking people for years to recommend any books on “how the line setting business works” to get an ‘insider perspective… I’ll be reading that shortly…

        Any other book recommendations?

  6. From my understanding by the time we receive the opening line, the sharps have already taken the advantage or value. For the small bettor you have to dedicate your life watching the lines & when they do move you have seconds not minutes to pull the trigger.
    Thank you for the info.

  7. i ve used sportsinsights for years. the 1 thing that bothers me is that ive noticed that once the % s settle in, they very very seldom change % wise, in other words if a sports book says “the patriots are receiving 75 % of bets, that % very rarely changes alot, which i find hard to believe, any explaination ?

    • It depends when you check during the week. Early in the week you’ll see fluctuations in the percentages. But as the week goes on, percentages settle in and don’t move drastically.

      Remember, we get the percentages from 7 offshore sportsbooks, so once they’re all reporting, it takes significant changes from one book to move the entire market average.

      It’s why we offer the individual percentages at each of the 7 books so you can see how the game is being bet at public books like SIA and Sportsbook.com as well as sharp books like 5Dimes and CRIS throughout the entire week.

      We also archive those individual betting percentages in Bet Labs, so users can historically analyze the market percentage, or choose to analyze the percentages from just one of our seven contributing sportsbooks for profitable trends.

    • The higher the number of bets, the more late action it will take to significantly alter the betting percentages. Typically by late in the week, the percentages barely move because so many people have already placed their wagers.

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