My ignorance of horse racing will show here. The outside track in racing would be the long way home & you will probably lose, but because the ground is less used it's more even and easier to run on. Lawson could have related very well to this.
Lawson was born in the mid NSW town of Grenfell, the same town as I was.
I think Hallom probably sang it as well as writing the tune. I'm sure I've heard a Garnett Rogers recording of it as well as numerous Aussies.
Priscilla Herdman's first album has a number of Lawson poems set to music, including Reedy River.