You have it right; "smoke" can be used to mean "win" (or maybe even, "win easily," or "win decisively").
When talking about lopsided contests, frequently-used slang verbs fall into a few different categories. For example, there's the word beat, along with its synonyms (such as drub, thrash, whip, and trounce – all of these words can be found in headlines, articles, and recaps of sporting events, elections, and business rivalries).
Another category would be metaphorical pressure from above, giving us words like stomp and crush.
Furthermore, when the contest involves blazing speed (such as races between sprinters or microprocessors), many of the verbs deal with fire, such as smoke, burn, or torch. Here are a few examples from recent news articles:
the next-generation Samsung Exynos 7420 chip, which is said to power these newest flagship phones, burns the competition with respect to 3D performance
He [Jeff Gordon] torched the field with 13 wins, which nearly doubled the next-best driver
"This is going to be a great game going against a team like that," Beckham said shortly after he burned the Dolphins with a seven-catch, 166 yard, two-touchdown masterpiece