Alex Lowndes refused to close his Gainz Fitness & Strength in Bedford in November 2020, when restrictions were imposed in England.
Bedford Borough Council's case collapsed but the authority said it had acted in the public interest.
A lawyer told the BBC she had successfully defended 23 similar cases.
Infection rates and hospital admission were rising in the area but Mr Lowndes said he felt strongly that gyms should remain open.
"It became clear it was an airborne disease, you're more prone to it if you're unhealthy, overweight, etc, and gyms contributed a very small amount to the spread of the virus," he said.
"From a mental health point of view, gyms are really important, people depend on them, and I think people underestimate that.
The authority requested an adjournment, which was rejected by magistrates.
Bedford Borough Council said regulations were enforced in line with its duty at the time.
"We brought this case because there was ample evidence for a successful prosecution following the non-payment of a fixed penalty notice and because it was in the public interest," said a council spokesman.
"It is important that we remember that the threat posed by the virus then was very different to that which we face now."
