Here is a guide to understanding class levels in horse racing. Over the years class levels have sliced and diced down into non-winners and such. It's become quite an ordeal, hopefully this information will be helpful in your journey in understanding class in horse racing.
Stakes and Handicap Races. Graded stakes and handicap races are the highest level of racing at any race track. The best horses usually compete in stakes competition. The owner must pay nomination fees and entry fees in order to run their horse. An example of a very early nomination fee is the Breeders Cup. This fee ($500) is paid in the foal's weanling year. Other fees are due a month or several weeks before the race is scheduled to run. The owner may also have to pay a fee to enter the horse during the entries. These fees are usually paid back in the purse. The nominations will frequently include many horses. The conditions of the race will determine who gets to race. (At present the industry is experiencing a horse shortage. As a result, it is often not necessary to leave horses out of races.)
The Racing Secretary assigns weights to horses in a handicap race. The toughest horse must bear the highest weight, while the least competitive horse will have the lowest weight. Assigning different weights is an attempt to level the playing field between competitors, just like a handicap in golf. There are also weight breaks for younger horses or for a filly racing against colts. A stakes or handicap race can also list age conditions like "two-year-olds," "three-year-olds," "four-year-olds" or "three and up."
Overnight Stakes. The main difference between an overnight stakes race and a stakes race is the amount of entry fees a trainer must pay to enter the horse. Overnight stakes do not usually require nomination, entry and starting fees. Nominations for overnight stakes are generally taken up to a week (or less) before the race. Overnight stakes bring out quality horses to compete for excellent purse money, though usually not as much as in the highest quality stakes races.
Claiming Races. A claiming race means that the horses may be purchased by a qualified, licensed person for the claiming price listed in that race. Many people do not understand why someone would want a horse to be claimed. Just as in other professional sports, not all horses are good enough to be top competitors in stakes level races. Racing in the claiming ranks allows the owners, as well as the horses, the opportunity to win against horses of the same caliber. Depending on the track, a horse may be entered for as low as $10,000 or as high as $100,000. There is also another type of race called the optional claimer. In this case, the horses may be eligible to be claimed or they may be allowance horses, competing under allowance conditions, and therefore are not eligible to be claimed. This type of race was created to combine two types of races and help the Racing Secretary have a fuller field of horses for this type of race.
Starter Allowance Races. A horse entered in a starter allowance race cannot be claimed. The horse, however, must have run at a certain claiming level (depending on how the conditions are written) during a designated time (for example "since August 1998"). The starter allowance generally brings together the best of the the claiming-level competitors.
Allowance Race. Allowance races are exactly like their name implies. Allowances are made or "conditions are set" in order for the horse to be eligible in that race. Examples of allowance races are: Non-Winners of 2 (races), Non-Winners of 3 (races), Non-Winners of 4 (races). As you can see, each level is more competitive. A horse that has never won two races might have a hard time winning a race against horses that have won three. There are often other conditions like "of a race since August 5th, 1998" or "at a mile or over." Sometimes there are monetary conditions set, such as "Non-Winners of $3000" or "Non-Winners of 5000 lifetime." A good handicapper will make note of these conditions. Some horses entered in the race may be competitive against Non-winners of $5000 lifetime, but not at all competitive against Non-Winners of three races.
These races are exciting for the fan and industry alike as we all learn whether a horse is going to be good enough to continue on to the stakes level of racing. It depends on the trainer and owner, of course, but often a horse will be run through all of their conditions before they are ever entered in a stakes race. Some feel that it is important to season a horse by going this route. Others feel that it is better to strike while the iron is hot and go after the better purses in stakes level racing. Some horses can't make the cut and go from the allowance to the claiming ranks and back over their careers.
Maiden Races. The term "maiden" means non-winner, the horse has never won a race. Some maidens, in fact, have never raced at all (nonstarter). There are two types of maiden races. Generally, the maiden special weight race is the best. A horse cannot be claimed out of a maiden special weight Race. The purses are also better than the maiden claiming race as well. Most of the time the maiden special weight races have the best youngest horses on the race track. They are often the best bred horses and often have the best connections (owners, breeders and trainers).