Wipeout was the first home videogame racing simulation. I know there was nothing in the arcades in 1972 with a racing theme, and I've never read anything about mainframe versions of a racing game, either. That being said, just as we saw with Invasion and Baseball, Wipeout is more boardgame than videogame.
Addressing the videogame portion first. The overlay is a stylized racetrack, reminiscent of the twisted cargo fleet's course in Submarine. The players take turns acting as the Driver and serving as the Timer. Prior to a racing phase, the Timer uses the left controller to position their light behind the clock on the left side of the overlay. The Driver uses the right controller to control the light that represents their race car. The Driver's goal is to maneuver their light around the race track. The Timer's job is to hit the reset button (on the Driver's controller!) to "serve" the BallSpot so that it comes in from the right side of the screen, crosses the screen and hits the light behind the left side clock to deflect back across the screen and off the right side again. The Timer player does this throughout the Driver's journey around the track. The Driver starts with 30 laps in their count. Every time the Timer player hits the reset button, one lap is subtracted from the lap count. If the Driver leaves the track, they lose two laps. If the Driver's light is actually hit by the Timer's BallSpot, they lose a big fat five laps! The idea is to get around the track before the lap count evaporates entirely.