This means tickets for the 24-strong horse race can cost no more than $20.83, a spokesman said.
Any money raised must be returned as prizes and no one is allowed to profit from organising the sweepstake.
Violating these regulations could incur a fine of up to $1000.
And beware of offering prohibited prizes. Firearms, liquor, tobacco and vouchers for sex services are all out of bounds.
More than 180 people are expected to gather at the Tauranga Citizens Club to watch the big race.
The club's calcutta was held last night, with tickets for the auction costing $2 each.
Club spokeswoman Dianne Marriot said festivities included a live band and dancing.
"We've got a fashion parade for the best dressed man and woman.
"There's prizes for second and third," she said.
Kiwi punters are expected to bet about $8 million on today's big race.
One of the largest bets placed yesterday was for $5000 on Australian horse Ethiopia, a TAB spokesman said.
"If it wins, the lucky punter will stand to get something in the vicinity of $100,000."
In 2011, 14 per cent of Kiwis aged over-18 placed a TAB bet on the cup.
This year, four New Zealand-bred horses will line up at 5pm (NZT) to compete for the $7.77 million prize money.
Kiwi-reared horses Maluckyday, Lights of Heaven, Precedence and Zabeelionaire are among 24 stayers entered.
Patriotic punters will be watching Maluckyday closely, as he came second in the 2010 cup.
And New Zealand's champion jockey James McDonald is engaged to ride Irish horse Fiorente.
The race was last won by a Kiwi-bred and trained horse in 2001, when Ethereal took out the Flemington showpiece event. The mare's victory was also the first Melbourne Cup race ever won by a female-trained horse.
Yesterday, reigning champion Dunaden was the race favourite. Commentators also expect French-trained Americain, which took out the cup two years ago, to put up a tough fight.
Glitz, glamour for our big-race starters
High heels, slick suits and hats will be out on show around the Western Bay as local companies and businesses celebrate the Melbourne Cup.
At Elizabeth, the new cafe in the ANZ building on Cameron Rd, revellers can watch the action unfold at a public party, set to be in full force by 4pm, ahead of the main race, which is just before 5pm.
One of the organisers, Karen Worley from Realty Services, said the event would be the first time the new tenants in the building could meet and mingle.
At the celebration, judges will be looking out for the best dressed male and female, as well as the person with the best hat. Spot prizes will also be given away.
Down the road, a large tent housing about 100 people will be set up outside the Cornerstone Pub on The Strand so punters can watch the horse racing action on the big screens.
A fashion parade will take place prior to the Melbourne Cup race and a live band will perform after the big race so guests can enjoy the remainder of their Tuesday evening in style.
At Da Bier Haus, celebrations are set to kick off at 11am with a garden-party themed event.
A spokesperson from the business said grass had been laid down and the premise would be decorated ahead of the cup celebrations.
In Mount Maunganui, punters can get their hands on oysters and bubbles at Latitude 37.
The bar and restaurant, under new ownership, is opening at midday and having a special luncheon before the afternoon celebrations begin, with prizes for the best dressed and best hat.
Melbourne Cup Day celebrations are also set to be held at the Tauranga RSA, in Greerton.
Sweepstake rules
Prize must not exceed $500
Any money collected must be returned through the prize
Prohibited prizes include:
Firearms
Liquor
Vouchers for sexual services
Tobacco products
Source: Department of Internal Affairs
