I am going to answer this question as a matter of opinion.
I do not think that the actual act of racing is cruel to horses, it is how the horses are cared for, trained and what happens to them when they are no longer valuable to the owner that could be considered cruel. This is just a generalization and does not include every owner or caretaker.
If an animal is well cared for before, during and after their racing career then all is well.
If an animal is not well cared for, it would be considered cruel.
If an animal is not retired in a humane manner, it is cruel.
Many animals love to have a purpose, a job to do and the loving care of the people who care for them. If they do not get value from their relationship whether it be a working relationship or not, it is cruel to the animal. They have feelings, they love, they need love and proper care.

you are all idiots. it's completely cruel to the animal. they train them too early which causes strain on their bones and the horses themselves are whipped a hundred times a day. if a horse breaks it's leg, the owner thinks that they wont ever race again, so they immediately put it down. they all think horse racing is about the money and winning the big race, but behind the glam and all that other shit, it's one of the most cruellest things that could happen to a horse.

Unfortunitly the more money people put into the racing indistry the harder the owners and trainers of the horses are going to push them. Everybody has a different opinion on how cruel it really is. At 2 and 3 years old a horses joint are not completly closed which means they are not done growing then. So if a race horse is still raced at high speeds with its joints not closed it is very likely to cause injury farther down the road. In my exsperiance i have seen a lot of horses come back from racing sound (healthy) but i have also seen many come off very hurt. Every trainer is different. Some will push a horse too much. When racing becomes all about money and not the animal is when things get dangerous. Now accidents do happen and unfortunitly a lot of horses as well as jockeys lose their lives over racing.
In the end it ends up not only being the watchers gambling it is also the horses and jockeys gambling just in a different way. Today there is a lot of things a race horse has to go threw to continue racing. The horse can not be raced with a broken leg obvisously. A vet check is usually in order before a horse is raced. Then after a horse races usually the trainer will have a vet look over the horse to make sure there are not bumps or bruises that could cause potential injuries. Unfortunitly the hardest part about racing a horse is trying to rehome them after racing when many times they end up in slaughter or in not so good homes. Although, there is quit a few whom find wonderful homes as well.