Artificial insemination will continue to be banned in the Australian thoroughbred industry after the Federal Court rejected Bruce McHugh's claim against its prohibition.

The former bookmaker and ex-chairman of the Sydney Turf Club has fought a long battle for the introduction of AI, arguing it was a restraint of trade.

After losing his case before Federal Justice Tony Robertson in 2012, McHugh appealed the decision.

That was rejected on Thursday.

Australian Racing Board chairman and prominent breeder John Messara, said the Federal Court had ended the matter once and for all.

"The issue of artificial insemination is settled once and for all," Messara said.

"We have said from the outset that our sport was not anti-competitive or a restraint of trade as proponents of AI are perfectly free to establish their own industry.

The rules of both the Australian Stud Book and the Australian Rules of Racing ban artificially inseminated horses from racing and breeding.