Although business information analysts are forecasting a 6.1 per cent dip in spending at the Melbourne Cup Carnival this year, bets will continue to rise by 1.6 per cent.

The expected increase in horseracing bets reflects the growing popularity of online betting for sports in Australia. A recent submission to the Joint Select Committee on Gambling Reform estimates that Aussies will bet $611 million on online sports in 2011. The amount is a 230 per cent hike from 2006.

The submission, made by Dr Sally Gainsbury from the Southern Cross University and Professor Alex Balszczynski of the University of Sydney, said online sports betting particularly attracts young male Aussies.

The study added that the young bettors are even expected to place larger wagers on offshore gambling sites due to lesser restrictions.

Another indicator of the popularity of online sports gambling is that there are 2,443 online gambling sites in Australia, 92 per cent of these are open to locals. The bettors could use 150 different payment methods, including those developed for use in commercial sites such as Facebook and iTunes.

According to IBIS, gambling would remain ahead of all other Melbourne Cup spending, while Cup attendees are still expected to splurge on fashion such as dresses, suits and hats, but spending on accessories may be reduced.

IBSWorld General Manager in Australia Karen Dobie forecast Aussies would spend for their Melbourne Cup appearance $6.7 million on dresses and suits, $6.18 million on hats and fascinators and $6 million on shoes.

Attendance, however, is expected to drop by 1 per cent to just below 350,000.