Melbourne Cup to Contribute $690 Million to Australia's Economy

The Melbourne Cup may be known as the race that stops the nation, but with the event expected to generate over A$700 million ($692 million) for the Australian economy, it's also a time when punters and spectators spend big on the sport.

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The Melbourne Cup has come a long way in its 150-year history. First held back in 1861, the race was watched by just 4,000 people, with the winner Archer, picking up a gold watch and 170 pounds. Fast forward to 2010 - the race is watched by more than 700 million people, with a prize pool in excess of A$6 million. From fashion to food and tourism, the Melbourne Cup literally sends Australia's economy into overdrive.

Trackside, it seems the event has recovered dramatically from the global financial crisis. Last year, more than 370,000 race-goers attended the four day event, consuming 310,000 bottles of beer and nearly 100,000 bottles of champagne. Corporate sponsorship is up 15 percent this year as big brands woo customers in lavishly designed marquees with huge entertainment budgets. Automaker Lexus has designed a three-level tent to hold 220 guests, complete with sky deck to watch the race and food from leading chef Neil Perry.

Fashion is the next big winner, with A$30 million spent on frocks, suits, hats and heels. Upmarket retailer David Jones says that Melbourne Cup season is one of their busiest periods of the year, while Sydney milliner Suzanne O'Brien says this period for around 80 percent of her business for the entire year.

"Last year I stayed up all night, I was stitching till I got on the plane. The global financial crisis really hit the millinery industry hard, but this year we're coming back," said O'Brien.

Australia's bookies will also be getting ready for their busiest day of the year. Last year, TAB Sportsbet placed 700 bets per second just prior to the race, while a record A$100 million was punted in the New South Wales and Victoria states alone. TAB Sportsbet's Glenn Munsie says the financial crisis has had no real impact on the race.

"Whether they're feeling the effects of the financial crisis, or they're absolutely flying, they'll find a way to have a bet on the Melbourne Cup."

Even as the finest horses battle it out for top honors in the world's richest handicap race, perhaps the biggest winner from this year's Melbourne Cup could be the Australian economy.