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You see Billy it's like this, you either smoke or you get smoked. And you got smoked.
— Sidney ‧ White Men Can't Jump
Behind the line May contain spoilers.
Our reading
An editorial interpretation.
Here "smoke" is competitive slang: you either beat the other person decisively or get beaten. The speaker then rubs it in by saying the listener lost. It's trash talk, with the blunt two-option framing making the loss feel especially final.
Context reviewed