Former Newcastle lord mayor and developer Jeff McCloy has lost a High Court bid to overturn a New South Wales law banning developers from making political donations.

The law also applies to gambling and tobacco interests.

Mr McCloy took the case to the High Court after he was brought before the Independent Commission Against Corruption over donations he made of more than $30,000 during the 2011 election campaign.

His lawyers argued the ban was at odds with the implied freedom of communication in the constitution and does nothing to prevent corruption, but that was today rejected by the court.

In June, lawyers for the NSW Government and the ICAC said political communication was not impeded by the law which only targets the source of funds from a group with a great deal to gain from influencing political decisions.

The High Court was also asked to look at the state's cap on donations for certain groups and the ban on indirect donations.

Lawyers for Mr McCloy said the law also prevented the tobacco, liquor and gambling industry from making political donations.

But, in their submissions to the High Court, they said it was wrong to ban a particular class of voters, particularly when the measure has no connection or was disproportionate to a legitimate end.

The submissions suggested the law does not achieve its aim of preventing corruption.

But lawyers for the State Government said in their submissions that was wrong and the law was appropriately aimed at that legitimate end.

They said the law only sought to control the source of the donations, not the communication between voters and legislators.

They also said developers were more vulnerable to the decisions of government and are in a different class to others, and in addition, make up a significant proportion of the complaints to the ICAC.

This was disputed by Mr McCloy's legal team, who said the state could only come up with eight examples over the last 25 years.

Mr McCloy today issued a statement and said he respected the decision of the High Court.

"I undertook this court case as I felt it was important to question the current law," he said in the statement.

"I believe that anyone regardless of his or her position is should be entitled to participate in the democratic process.

"The High Court has ruled otherwise and I respect the decision."

The High Court ordered Mr McCloy to pay all costs.

Mr McCloy has taken separate action in the New South Wales Supreme Court, seeking to prevent the ICAC's findings in relation to Operation Spicer from being made public.

The court is due to hear that case in November.