Refers to the racing pattern of getting back in the run and conserving energy, with the expectation of running on in the final furlong.
It's usually jockeys who are described as smoking the pipe, referring to the fact that they are so calm and relaxed with their mount's position, and are merely waiting for the final stages of the race.
Mate 1: "What does McEvoy think he's doing? He's got our horse stone motherless last."
Mate 2: "Don't worry cobber, he's smoking the pipe. He'll fly home."
