The state of Victoria, of which Melbourne is the capitol, celebrates Melbourne Cup Day with a public holiday, and the rest of the nation stops for the 5 minutes or so that it takes to run and listens to it on the wireless or TV.
People who never gamble on anything will have a bet on the M/Cup. A lot of businesses / groups / families run a "sweep" in which everyone puts in a dollar or so to pick a horses name out of a hat. The money is divided up into 1st. 2nd. 3rd. and last.
The promo for the race is - the race that stops a nation - and it bloody well does.