The woman, aged 60, is reported to have had a seizure during the event at a hotel in Hervey Bay, Queensland, to mark Australia Day on Sunday.
Contestants had earlier been filmed speed-eating the lamingtons, a traditional sponge cake covered in chocolate and desiccated coconut.
She was given CPR at the scene and taken to hospital but later died.
Witnesses said the woman had crammed one of the cakes into her mouth when she appeared to get into difficulties.
