“Smart money”—money that sophisticated, high-rolling people spend—is a term that has been used in horseracing since at least 1893. The term “smart money” has also been used since the 17th century with the meaning of compensation for an injury. “Smart money” moved from horseracing and gambling use to Wall Street by the 1920s and 1930s. The film Smart Money (1931), featuring Edward G. Robinson and James Cagney, further popularized the term.
 
The term “dumb money”—money from small, unsophisticated investors—has been cited in print since at least the 1980s.
       
 
Wikipedia: SmartMoney
SmartMoney The Wall Street Journal Magazine of Personal Business was launched in 1992 by Hearst Corporation and Dow Jones & Company. In 2010, Hearst sold its stake to Dow Jones. Its first editor was Norman Pearlstine. It is published monthly and its current circulation is 824,327.
 
SmartMoney‘s target market is affluent professional and managerial business people needing personal finance information. Regular topics include ideas for saving, investing, and spending, as well as coverage of technology, automotive, and lifestyle subjects including travel, fashion, wine, music, and food.
 
(Oxford English Dictionary)
smart money n. U.S. money bet or invested by persons with expert knowledge; transf. knowledgeable persons.
1926 Amer. Mercury Dec. 464/2   In referring to money wagered by persons with good tips or information, the term used is smart money.
1930 W. R. Burnett Iron Man i. 5   ‘Well,’ said Regan, ‘all the smart money’s on the black boy.’
1947 Sun (Baltimore) 6 Aug. 10/5   Bookmakers and layoff men are gamblers and many times they add personal wages to ‘smart money’.
(...)
smart-money, n. 
A sum of money paid to sailors, soldiers, workmen, etc., as compensation for disablement or injuries received while on duty or at work.
1693 London Gaz. No. 2836/3,  Smart-Money to such Seamen as have been Wounded in Their Majesties Service.
1696 N. Luttrell Diary in Brief Hist. Relation State Affairs (1857) IV. 28   No seaman‥not registred shall have any smart money.
 
15 January 1893, Daily Inter Ocean (Chicago, IL), pg. 7:
In the handicap at six furlongs, Glenoid, substantially supported by the Smart money, spreadeagled his field and won handily by three lengths from the outsider, Templemore, in 1:17 1/4.
 
24 October 1894, New York (NY) Herald, “Luck of St. Asaph Bettors First Money Won By the Favorites and Three Outsiders,” pg. 9:
Long Bridge and Seatauket were played to beat him, and both carried a lot of smart money.
 
Daily Racing Form Archive
24 November 1896, Daily Racing Form, “Dorian Fails Once More,” pg. 1:
Silgo was an even money chance for the first race but he could never get to Highland Fling, a long shot chance shrewdly and carefully played by smart money.
 
Daily Racing Form Archive
30 June 1898, Daily Racing Form, “David Tenny’s Fast Race,” pg. 1:
Lady Irene carried the smart money.
   
Google Books
Smith’s Financial Dictionary
By Howard Irving Smith
New York, NY
1903 [1902]
Pg. 483:
Smart money. A term applied to money paid for release from an agreement. Snap judgment.
       
24 October 1907, Augusta (GA) Chronicles, pg. A5 ad:
WALL STREET TREMBLES
(...)
We have the best policies on earth and there are few of them left. Get on the “Band Wagon” boys—the “smart money” is coming our way.
The State Mutual Life Insurance Co. of Ga.
 
20 July 1924, Omaha (NE) World-Herald, “One Born Every Minute,” pg. 10 col. 3:
The Californians bet no money on Mr. McAdoo. They just bet against Governor Smith, and cleaned up several hundred thousand dollars of “smart money” from down-town New York.
   
Wikipedia: Smart Money (film)
Smart Money is a 1931 film starring Edward G. Robinson and James Cagney, the only time Robinson and Cagney made a movie together, despite being the two leading gangster actors at Warner Brothers studios all through the 1930s. Smart Money was shot after Robinson’s signature film Little Caesar had been released and while Cagney’s breakthrough film The Public Enemy was also being filmed. The Public Enemy had not been released and so Smart Money is the only film in which Cagney played the kind of supporting role usually done by Humphrey Bogart later in the ‘30s.
 
Plot
Robinson plays a barber who goes to the big city to become a gambler but finds himself rooked by a blonde and a gang of thugs, whereupon he vows to take revenge, with the help of his own henchman (Cagney).
 
Google Books
Years of Plunder;
A financial chronicle of our times
By Proctor W. Hansl
New York, NY: H. Smith and R. Haas
1935
Pg. 139:
...traders throughout the country began to take an interest, but the “smart money” was not deceived.