To be better "hands down" is an idiomatic American English expression meaning to be far better than one's competition. It derives from a common American English expression, "to win hands down." This is the most common form of the expression, and indicates an effortless victory.
The term "hands down" has its origin in the world of horse racing. In horse racing, a jockey must keep the reins tense in order to control the speed of his horse. To do so, he holds his hands in front of his body. Lowering his hands, and therefore the reigns, results in a reduction of the horse's speed.
In 19th-century horse racing, a jockey who was far out in front of his opponents would relax the horse's reins — giving the horse a rest and reducing its chance of injury — as the end of the race approached. The horse could then run over the finish line at a leisurely pace. Since relaxing the reins required a jockey to lower his hands, this position was known as "hands down." Thus, when a jockey was said to win a race "hands down," he won easily, leaving other jockeys and their horses far behind.
From its sporting origins, the expression spread into more general usage. Just as a jockey who ended the race with his hands lowered was demonstrating his lack of concern for opposition, winners in other contexts could be said to win "hands down." The term became synonymous with decisive victory.
From the specific meaning of victory, the expression spread by analogy to other forms of comparison. For instance, it could be said that one product was better than another "hands down." In modern English, the expression usually refers to one thing that is effortlessly superior to others.
"Hands down" is one of a number of expressions with origins in horse racing. For example, "home stretch," used to refer to the final stage of a project or journey, comes from a horse racing term referring to the last section of a track before the finish line. "Down to the wire" similarly refers to the wire stretched across a race track at the finish line. The opposite of winning "hands down" is winning "by a nose," another expression which originates from horse racing. To win "by a nose" is to win by the narrowest of margins, as in the case of a hockey whose horse's nose is the only part to cross the finish line before another's.