[mechanical engineer hat]
If I may present my highly scientific illustration:

From what I've seen of his hammer, the center of mass is effectively moved away from the center of rotation, thus increasing rotational inertia.
Let's assume that, for the ease of calculation, that the stock hammer and the race hammer weighs the same, with the only difference is in the hammer design.
It would be probably safe to assume that the difference between the rotational velocity of the factory and race hammer is negligible.
If you remember from your physics class that kinetic energy is half times the mass times the square of the velocity:
KE=1/2*m*v^2
Since this is a rotating system, let us substitute velocity (v) with (wl) where w is the angular velocity and l is the length
we get:
KE=1/2*m*l^2*w^2
Since we assumed that they both have the same mass and have the same rotational velocity, we can compare the factory hammer (lf) with the race hammer (lr) as such:
(lr)^2/(lf)^2
now let us assume that lf=1 and that the race hammer shifted the center of mass to 1.1 times the factory center of mass so we have an lr of 1.1
(1.1)^2/(1)^2
or
1.21/1
or 21% more kinetic energy
Now all of this is based on numbers pulled out of where I, and many politicians and statisticians pull their numbers out of, but it illustrates what is at work.
In actuality, they won't have the same rotational velocity; but the race hammer, due to shifting the center of mass further out from the center of rotation has more overall rotational inertia. There may be a point where it's shifted so far out that or that it's too heavy that it causes it to have less rotational inertia; but at that point, it would be ridiculously heavy or ridiculously long.
[/mechanical engineer hat]