The edition of the Run Nation Championship was scheduled to be held on Saturday at Sydney's Randwick Racecourse.
But ticket-holders will be left disappointed after the event was shut down in the NSW Supreme Court on Thursday.
Organisers attempted to argue the so-called "run it straight" event - in which competitors have to run directly at each other and try to "win" the collision - was not a combat sport under state law.
A combat sport is one where "the primary objective of each combatant ... is to strike, kick, hit, grapple with, throw or punch one or more other combatants".
The Combat Sports Authority cancelled the event, saying it had not complied with the rules required for such an event to be staged.
Justice Andrew Colman backed in that decision after Run Nation sought a judicial review.
"The wording in the code describing the contact as a 'tackle' cannot alter the fact RNC (Run Nation Championship) is a collision sport," Justice Coleman said in his judgement.
"The essence of the activity is the collision between them."
Run-it-straight contests have grown in popularity in recent years with contests being widely viewed by young rugby league fans on social media.
Brain injury organisation Synapse says the sport can cause severe concussions and long-term neurological damage.
Ryan Satterthwaite - a 19-year-old from New Zealand - died of a serious head injury sustained during an impromptu game with friends in 2019.
Multiple former NRL players are connected with Run Nation, including former Canberra Raiders and Melbourne Storm player Sandor Earl, who was in court for the decision.
Earl received a four-year ban for doping in October 2015.
Scheduled to compete against each other on Saturday were former Sydney Roosters forward Dylan Napa and ex-Canterbury-Bankstown Bulldogs enforcer Sam Kasiano.
Justice Coleman ruled that the intense physical contact was the only necessary element of the sport, meaning it could not be anything other than a combat sport.
He also found Run Nation should have been aware of the possibility of the event falling foul of the regulator.
"Run Nation has been on notice of the Authority's concerns about the nature of the activity since 29 May, 2026," the judge said.
"Despite the discussions between the parties ... Run Nation was not able to satisfy the Authority that it had dealt with its concerns."
After the decision, Run Nation chief executive Tremaine Fernandez said the ruling was not a death sentence for the sport.
"This hearing was not about RNC being banned," Mr Fernandez said.
"RNC is here to stay and, based on the ruling today, we're excited to work with the Combat Sports Authority and the opportunities that may bring."
Mr Fernandez said Saturday's event at Randwick would be postponed to "later in 2026".
The organisers said ticketholders could request refunds or use the tickets at the yet-to-be-scheduled event.
Justice Coleman acknowledged there would be consequences for those excited to see the event take place.
"There may be commercial consequences for Run Nation and its backers because of this decision," he said.
"There may also be inconvenience to members of the public who have purchased tickets to attend the event.
"Neither of those consequences are relevant to the ... decision I have made."
Run Nation is also required to pay legal costs.
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