If a player deliberately disconnects, they will be removed from the race and will appear as a DNF on the race results screen, and will receive a loss (DNF stands for "Did not finish").

However, if there is a temporary disconnection anywhere between you and the other player, Nitro Nation will let both racers finish their runs. If the connection is re-established within a short period of time, the server will accept both races and award the win to the fastest player.

Disconnection is not a viable cheating mechanism as each race is simulated and checked by the server before the results are announced. However, there is no way to prevent some players from dropping out of races they can't handle ;)