The incident occurred on Saturday during a so-called "Demolition derby" where drivers deliberately crash into each other, just north of Newcastle in southeastern Australia.
Videos on social media show a car driving at full speed straight through the guardrail and into the audience.
"This was an unpredictable accident and that's what can happen. It's an unpredictable sport," said Shane Ryan, one of the organizers for Australian broadcaster ABC.
Six people are still being treated in hospital. The driver of the car involved in the accident also received treatment, but has been released from hospital. His vehicle has been seized by the police.
