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Horses are allocated a weight in a race. In handicaps weights are decided based on past form and the objective is to equalise the chances for each horse.
In theory weights in a handicap mean every horse should finish close together but this rarely happens. In non-handicaps horses carry the same weight and then allowances are applied.
The purpose of a weight allowance is to level the playing field. Allowances are based on sex, age and the number of winners that the jockey has ridden. Weight allowances are clearly stated in the race conditions and appear on racecards so people betting on a race know how the weights have been adjusted.
Generally in flat and jump races female and younger horses will receive an allowance from the male runners and older horses. The reverse of a weight allowance is a penalty, which is applied when a horse has won at a higher level. Even in the championship races, weight allowances are given to fillies and mares and young horses.
There is a debate about whether weight allowances should be applied in the very best races or all horses should carry the same weight so the best horse is identified. In same sex races the only weight allowances are based on age.
There have been some high profile cases of weight allowances being factors in the outcome of races. In the 2016 Champion Hurdle Annie Power received seven pounds form the male horses and won the race by less than five lengths. Enable won some major all-weight flat races in 2017 in receipt of an age and sex allowance.
The thinking is that young female horses are naturally weaker and slower than older male horses but weight allowances clearly affect the result of many races.