Racket is the usual spelling of the word for the paddle-like device used in net games such as tennis. Racquet is an alternative form—it was originally a misspelling of the French word, and has appeared to varying degrees since entering English in the 19th century—now mainly confined to certain contexts, appearing especially in names (e.g., West River Health & Racquet Club) and in reference to the sports of squash and racquetball. In tennis, racket is the preferred spelling. This is the case throughout the English-speaking world, but the preference for racket is strongest in North America.
Racket is also the correct spelling in reference to (1) a loud distressing noise, (2) commotion, and (3) a dishonest and profitable business practice. Racquet has no definitions outside sports.
Roebker slammed his racket on the court three times after losing match point. [Ball State Daily News]
I once had a Saturday job selling tennis rackets in a sports shop. [Financial Times]
To its credit, the ministry under Jairam Ramesh is no longer the money-making racket it once was. [LiveMint.com]
Martin was only three years old when she held a squash racquet for the first time. [Port Macquarie News (link now dead)]
To the uninitiated, squash is the most esoteric of all the racquet sports. [The Riverdale Press]