The event took place at the Beach House Hotel on Sunday to mark Australia Day — a public holiday typically celebrated with parades, fireworks and food festivals around the country.
Videos taken by witnesses show the hotel bar packed with people, cheering on contestants seated at a long table covered with plates of food and glasses of water.
The woman had been eating a lamington — a type of sponge cake coated with chocolate and coconut — when she had a seizure and choked, Nine News reported.
The bar’s security guard and staff rushed over and performed CPR until paramedics arrived to take her to Hervey Bay Hospital, where she later died.
It added that hotel staff were receiving “professional support,” and thanked patrons and emergency responders.
Some see it as a day to celebrate Australian culture and lifestyle — but indigenous communities see the date as the beginning of the deliberate destruction of their people and culture at the hands of colonists.
The controversy over the holiday has heated up year after year, with some saying a more appropriate name would be “Invasion Day” or “Arrival Day.”