Alan Berry, 44, and blacksmith Steven O'Sullivan, 36, both denied trying to defraud gamblers.
The pair were accused of entering Hillside Girl in a Carlisle race in June 2003 when she was lame or unfit.
Prosecutors said that after a review it was "concluded that there is no longer a realistic prospect of conviction".
Mr Berry, of Moss Side Racing Stables, Cockerham and Mr O'Sullivan, of Valiants Farm in Preston were accused of conspiring to defraud the users of the Betfair internet betting exchange and other punters by entering the horse in the race, agreeing not to disclose it lame or unfit and laying bets on it to lose.
The pair were due to face trial next week.
The decision by the Crown Prosecution Service (CPS) follows the collapse of a race-fixing trial against jockey Kieren Fallon and five others, last month.
A CPS spokesman said: "Although the trials concerned different defendants and a different horse race, there were a number of elements common to both, as they emerged from the same investigation.
"It is important that the CPS keeps all cases under review, particularly where there has been an unsuccessful trial on a linked matter.
"After careful review, it has been concluded that there is no longer a realistic prospect of conviction for either Mr Berry or Mr O'Sullivan."