A suicide bomber detonated an explosive device in a crowd of about 500 people watching dog fights west of the city of Kandahar, a local television channel, Tolo, said.
The exact number of casualties is still uncertain.
"At the moment the casualties are just being counted and we cannot provide exact numbers," an Afghan Interior Ministry spokesman said.
The head of the Kandahar police force was reported to be among the dead.
Afghan authorities are blaming the hard-line Islamic Taliban movement for what may prove to be the single deadliest terrorist attack in the country since the group was overthrown in a U.S.-led campaign in 2001. The Taliban have not yet claimed responsibility, however.
"This suicide attack was the work of the Taliban," the regional governor, Assadullah Khalid, said.
Dog fighting is a popular pastime in Afghanistan. It was banned under Taliban rule.
The United States and Britain have joined efforts to urge other NATO members to share more of the combat burden in Afghanistan, where the alliance deploys a 42,000-strong International Security Assistance Force.
The Taliban carried out more than 140 suicide missions in Afghanistan last year. More than 6,000 people died in the country fighting in 2007, nearly 2,000 of them civilians, according to official sources.
