ALBANY — A group fighting a casino proposal in a rural upstate town won a legal victory on Friday when an appellate court ruled that the town board had violated the procedures of a state environmental law.

The decision, by the Fourth Judicial Department of the Appellate Division of the New York State Supreme Court in Rochester, was just the latest twist in a battle over the proposed casino in Tyre, N.Y., about halfway between Syracuse and Rochester. The fight pitted a Rochester-based developer, Wilmorite, against a local group that has fought Wilmorite’s plans for the $425 million casino resort, known as Lago.

Those opponents have included several Amish families, including one whose farm is across a two-lane country highway from the proposed site of Lago.

Despite the objections of the Amish and others, Wilmorite was selected in December by a state board as one of three winning bidders for a casino license, in part because of strong backing from the town board of Tyre, which has about 950 residents.

But on Friday, the appellate court found that the board had violated the procedures of the State Environmental Quality Review Act when it did not promptly provide a written explanation for its June 2014 finding that the casino would essentially have no environmental impact.

The town had said their reasoning was evident in records of a town meeting where the environmental decision was made. But the court found that explanation insufficient in the face of the “strict compliance” required under the law.

“Anything less,” read the majority opinion “will result in annulment.”

Indeed, opponents hailed the decision as a potentially fatal blow for the Lago project, saying that several requirements of the license application process were effectively invalidated as part of the decision. “Today’s decision was the light at the end of the tunnel,” said Mario J. Fratto, a lawyer for the opponents, adding, “We are truly overcome with joy.”

But Wilmorite said that such celebrations were premature. “This decision was on technical grounds that we anticipate will be rectified in the near future,” said Steven Greenberg, a spokesman for the Lago project, expressing confidence in “a license being issued by the Gaming Commission.”

For its part, the Gaming Commission — which could begin issuing licenses in the fall — said it was reviewing the decision.