A retired accountant had argued that the sale of his details by the City of Wakefield Metropolitan District Council breached his rights under the Data Protection and Human Rights Acts.
A national electoral register connecting more than 400 local electoral registers is due to be in place by early next year.
The ruling has sent shockwaves through local government. If members of the public do not want their details passed on to the private sector, the value of a national electoral register would be considerably reduced.
Banks and credit reference agencies rely heavily on electoral roll records for dealing with customers.
"I can't see how you can deliver guarantees of income streams to the suppliers tendering for the national electoral register contracts," said Robert James, an address information consultant. "How can you sell the data when it's of an unknown quality?"
The Improvement and Development Agency, which is overseeing the national electoral register through its subsidiary Local Government Information House, refused to comment.