The term handicapping, (seemingly found in a lot of sport games too), is the practice of assigning advantage through scoring out compensation/s or other advantage given to all participants of a bout, mainly to render an equal chance for all the participants (entries) therein to win the given match. In horse racing, this is mainly applied by two things, primarily and predominantly more exercised is the use of weights, and the other one assigning a farther stretch of distance to cover depending on the horse.

In principle, a horse with a higher rating (means it has performed excellently over its past races garnering top ranks or even winning the race) is given with the disadvantage, in order to make it possible for its competitors with a lower rating to participate in the game while still maintaining a fair fight. In theory, you get to match up different horses with different capacities by placing a “handicapper” on better leveled horses, and have them run on a toe to toe fight with the remainder of the bunch.

Simple as it may sound, getting to set a properly fair match is critical in these events, that trainers even exploit the system to round up successively on the races. In practice, a horse gets its rating from the results of its racing career. For one lose in its first fight, it gets a rating of 50 – an E class in the world of horse racing (the lowest possible rating).

Some trainers tend to abuse the weakness of the system, by enlisting powerhouse horses over tourneys that they are not proficient with (say having a quarter mile race horse run in farther stretches in its first fight). Losing on its first match, brand the horse with the lowest possible rating of E, whilst all the while it predominantly conquers a different league of race. At the chance its gets enlisted for the following season, they enter the horse in its proper leg of races, branded as an E class (without any handicapper in place), and gets to sweep five races in one go.

In more recent times, adding up a weight on better leveraged horses (or higher rating horses) is the widely and more accepted system of handicapping race horses. Determining the weight varies in different horses, assigned of course by a regularizing body therein. At the chance a “handicapped” horse loses its match, it gets a deduction on its rating, qualifying for a less handicapper weight in its following race entry.

Handicapping is used in horse racing world to provide more tourneys and events that could qualify both the lower rated horses and better rated horses in a number of arranged match. As they tend to give out leveled performances by putting on handicappers, the outcome of a match becomes highly unpredictable, with a heated, toe to toe match altogether becoming the plausible scenario in the given race -- which is of course gives off a more suited environment for the bet game held therein.