Race gas at the track, what’s the deal?

Last trackday I noticed a lot of guys on the track were running race gas. I could smell it every time I got behind one of em. Also many of the bikes that were running race gas looked pretty much stock to me and I highly doubt they had any internal engine mods.

So what’s the purpose of running race gas at the track?

Should I be smelling it when I’m on their tail? Doesn’t that mean it’s not burning all the gas and thus not running as good as it could be?

Thanks in advance.