Greene King applied for a bingo operator licence that would allow it to offer unlimited stake and prize bingo and linked bingo where players join a national game in 2014.
Pubs are currently allowed to host bingo, but there are strict rules on how much players can stake and win.
The pub company argued the Commission had overstepped its remit when it refused the licence, stepping on the toes of the licensing authorities.
However, Judge Howard Levenson rejected the pub company’s arguments.
Poppleston Allen partner, Nick Arron, warned the Gambling Commission would ‘not look favourably’ on any applications from pubs looking to provide commercial bingo or higher stake gaming machines.
However, he stressed the decision would not change pubs ability to offer low stake bingo or gaming machines with a jackpot of up to £100.
Gambling Commission director Helen Venn welcomed the decision.
She said: “In our view, commercial betting, gaming, bingo and any associated high stakes and prize machines, should only be provided in a separated premises licensed for that specific purpose-premises that adults make a deliberate choice to visit in order to gamble.”
The case will now be send back to the first-tier tribunal for reconsideration.