The New Zealand Animal Law Association (ALA) and animal rights lobby group SAFE took the Agriculture Minister and National Animal Welfare Advisory Committee to court over their code of welfare for rodeos, seeking a judicial review.
The groups hope to bring an end to a sport they said subjects animals to "unnecessary and unlawful" stress.
While the court declined to make a ruling on the legality of rodeo, it did decline the judicial review sought by ALA and SAFE.
The court said the proper place to challenge the practice of rodeo would be during a consultation process run by the National Animal Welfare Advisory Committee.
About 35 rodeos are held each year in New Zealand, with animals integral to events such as bull riding, calf roping and steer wrestling.