Damien Richardson, 57, launched the challenge in the Victorian County Court after he was in November found guilty of intentionally performing a gesture that resembled a Nazi salute.
A magistrate had determined the former Neighbours star performed the salute at a gathering of the ethno-nationalist National Workers Alliance at a restaurant in Melbourne's southeast in September 2024.
Richardson complained about Melbourne's Age newspaper likening him "to Adolf Hitler" before performing the gesture, with the event filmed live on social media.
He lodged an appeal against his conviction but Judge Kate Hawkins on Monday threw it out, finding him guilty of the offence.
She did not read out her reasons for the decision, instead providing written reasons to the parties.
Richardson was originally sentenced to a "restorative justice" process, where he was required to complete 10 psychological counselling sessions and shadow a Jewish leader.
But in submissions on re-sentencing, prosecutor Chris Glerum argued a community corrections order was more appropriate given the seriousness of the offending.
Parliament had made it clear Nazi gestures had no place in society and they caused genuine harm to members of the community, Mr Glerum said.
The prosecutor argued Richardson would have known that some of the attendees sympathised with Nazism and his appearance was being used as a drawcard for the event.
Defence barrister James Catlin criticised those submissions as being "extraordinary", saying there was no evidence Richardson knew there would be Nazi-sympathisers at the event.
The Alliance was not a prescribed organisation under the national prohibited hate group list established in January, the lawyer said.
Mr Catlin argued his client performed the gesture sarcastically and ironically, and he was now being wrongly smeared as a Nazi.
The barrister urged the judge to discharge Richardson as he had already been punished, with the entertainment industry "cancelling" him amid other "public vilification".
"He's already suffered considerably," Mr Catlin told the court.
Judge Hawkins ordered Richardson to undergo a community corrections order assessment ahead of his sentencing hearing in September.
The judge said she was considering possible supervision, community work and treatment conditions, although she was yet to decide on the final sentence.
Richardson will return to court on September 1.
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