The north London club had applied to double the number of music concerts they could stage at their stadium from three to six.
Islington Council rejected the application while a planning inspector dismissed the club's initial appeal in January of this year.
Arsenal argued that there was a "clear error" in the decision-making process but this was rejected on Wednesday by Mr Justice Cranston who delivered his judgment in London.
Concerts featuring Bruce Springsteen, Coldplay and Muse have generated hundreds of thousands of pounds in extra revenue for the club but opponents have voiced concerns over noise and rowdy music fans.
The inspector said that if Arsenal could afford to buy a player, such as Mesut Ozil for around £43million from Real Madrid in 2013, it could not plead poverty.
Applying for a judicial review, club representative Mr Dan Kolinksy submitted that the inspector had failed to apply the law correctly when he decided the proposal to double the number of concerts "did not accord with the development plan" for the stadium.
Lawyers for the inspector and Islington argued that the inspector followed the correct approach and there was no substance in the club's challenge.
During the public inquiry run by the inspector, Arsenal chief executive director Ken Friar said the club needed the money from the gigs to remain financially competitive with other leading European teams.