I agree completely with both previous answers; I do have a little bit to add, though.
My daughter has this bizarre notion that 'pretty' women should always win. I have no idea how to dispel this misconception of hers.
This is a very destructive idea. Hopefully it will go away soon, but it doesn't hurt to work on it.
Pretty is pretty, and nothing else. It doesn't make anyone better at anything or entitle anyone to anything. It's meaningless to self-confidence because the definition of pretty changes over time, and we have no control over it. It's no different than saying someone should win because they wear a size 7 shoe. Start teaching her critical thinking skills, to question the things she believes until she finds truth which is acceptable to all of you.
I would also teach (and model) gratitude. Not only has gratitude shown to correllate with improved health (mental and physical), but it's a great coping mechanism for people who compare themselves with others and come up short. To take simple (and extreme) examples, I could either wish for the impossible (that I was as good at tennis as Serena Williams, as smart as Einstein, as talented as... etc.) or I can be grateful that such people exist, to show us what wonderful capacities exist in humans. (The first approach is a no-win situation, the second is an inclusive, win-win situation.) Because there will always be people who are better than us in any given thing, and gratitude is so much better than envy or disappointment.
In kissing your husband, you were in effect showing gratitude for his skill and the fun you had, and you were happy. In contrast, she was unhappy for an hour. That can be a starting point for discussion, because everyone over the age of 3 knows that happy is way better than sad.
My husband wants to race with me when we go swimming this week.I would love to compete with him, but I am afraid of my daughter's emotional outburst if I lose (which is more likely). Should I go ahead with it?
Absolutely, and be happy for the winner.
Giving thanks can make you happier
Gratitude and well-being: A review and theoretical integration