In simple terms, in horse racing, a penalty is a disadvantage, or handicap, in the form of extra weight to be carried, imposed on a horse for winning a race under certain circumstances. In Group Two, Group Three and Listed races on the Flat, for example, penalties are incurred by horses that have won at the same, or higher, level within a certain period of time.
Usually after three runs on the Flat, or three runs over hurdles or fences, or a combination of the two, a horse qualifies for an official rating. The official rating represents the ability of the horse, according to a team of handicappers at the British Horseracing Authority (BHA), and is reassessed after each subsequent race.
If the horse wins, say, a handicap race – which each horse has a theoretically equal chance of winning – it must, logically, have performed better its current official rating so, when reassessed, its official rating will increase, typically by 6lb or 7lb. However, if the same horse if turned out again within the space of seven days – that is, before it has been reassessed by the BHA handicappers – it typically has to carry a standard penalty, of 6lb or 7lb, to allow for that fact.