The case began in 2000 when BHB took legal action against William Hill over the use of racing data such as runners and riders extracted from the BHB database.
The case is crucial since it means that publicly available information can be used in a commercial setting even if it is on another organisation's database.
The British racing industry's governing board had expected to generate £140m in income during 2006 from its database.
But the judges in the Appeal Court upheld the guidance of the European Court of Justice that had interpreted an EU database directive in William Hill's favour, saying that the bookie did not have to pay for the data.
In outlining the reasons for the decision, all three judges admitted on Wednesday that while they had sympathy for the BHB's case, guidance from the European Court Of Justice was clear.
Industry experts suggest that the ruling will have an impact on the funding of horse racing and perhaps other sports.
William Hill said in a statement: "William Hill is pleased that the Court Of Appeal has confirmed that the judgement of the European Court has found in its favour and allowed the appeal.
"Whilst any future litigation remains at the call of the BHB, William Hill hopes that the racing industry will now look forward to developing a valid alternative for the future funding of racing."
William Hill's costs of £800,000 were accorded to BHB.
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