BOSTON — A three-judge federal appeals court panel this week heard arguments in a high-stakes legal battle that will determine whether an electronic bingo parlor can be operated on tribal lands at the western tip of Martha’s Vineyard.

Members of the Wampanoag Tribe of Gay Head (Aquinnah) need the appellate court to reverse a lower court ruling in order to gain the right to pursue what they believe would be a substantial source of revenue to help underwrite tribe programs and services.

A decision by the appeals court to allow a class II (electronic bingo) gambling operation would invalidate a key provision of a 29-year-old federal law, which granted the tribe more than 400 acres of land but also required it to submit to state and local laws, including those regarding gambling. The tribe’s appeal is opposed by the town of Aquinnah, an Aquinnah community group and the state of Massachusetts.

The U.S. Court of Appeals for the 1st Circuit, which heard oral arguments Tuesday, ultimately will decide whether to affirm or overturn a 2015 decision by U.S. District Judge F. Dennis Saylor 4th that rejected the tribe’s position.

Ground zero for the controversy has been a 6,500-square-foot building on tribal land in Aquinnah, where the tribe planned to locate the gambling operation and begin operating it as early as last year, until Judge Saylor’s decision derailed those plans. Since then, tribal leaders have decided to complete the building for its original purpose, as a community center.

At the center of the legal case are two key findings by Judge Saylor. He ruled that the 1988 Indian Gaming Regulatory Act (IGRA), which provided a national regulatory framework for Indian gaming, did not repeal the 1987 Massachusetts Settlement Act that provided land to the tribe and subjected it to state and local laws. 

In addition, Judge Saylor said that even if IGRA “impliedly repealed” the Massachusetts Settlement Act’s provisions, the Aquinnah tribe does not exercise sufficient government authority to qualify for gambling under the law.

During the oral arguments Tuesday, one of the appellate judges suggested the tribe might be in an unfair bind. Even if the tribe does not now provide sufficient government services to qualify, revenue from a gambling operation — the tribe’s projections are $4.5 million to $5 million in annual net income — could potentially pay for those services in the future.

“It just seems there’s a Catch-22,” said Judge William J. Kayatta Jr. Chief Judge Jeffrey R. Howard and Judge Juan R. Torruella jumped in, wondering why the services now offered by the tribe don’t constitute sufficient government authority.

The lawyers also wrangled over whether the Settlement Act and the Indian Gaming Regulatory Act work in harmony, as Judge Saylor ruled last year. Scott Crowell, an attorney representing the tribe, said the two laws are “repugnant to one another” and thus IGRA should invalidate the restriction on gambling contained in the earlier legislation.

But Assistant Attorney General Juliana deHaan Rice, presenting the state’s case, argued that “Congress did not intend to sweep clean” all gambling prohibitions previously adopted, such as the Settlement Act’s.

Attorneys for the state, town and Aquinnah/Gay Head Community Association have argued that the same Congress that adopted the Settlement Act in 1987 — and inserted the specific gambling language — also was responsible for passing IGRA the following year and had no intention of repealing the gambling restrictions on the tribe.

Town counsel Ronald H. Rappaport also told the judges that lifting the town and state prohibitions and allowing a gambling operation would take a significant toll on “one of the poorest towns in the Commonwealth,” which now provides police, fire and emergency medical services.

“It falls to the town,” Mr. Rappaport said. “The town is responsible [if a need arose at a casino]. We cannot handle that . . . . There are real-life consequences here.”

The judges asked what other tribes without resources have done when operating a gaming operation. Mr. Crowell said they have worked out agreements with local authorities and paid for the services. Also arguing on the side of the tribe was an attorney from the U.S. Department of Justice.

Mr. Crowell contended that the tribe’s gaming should be viewed in the context of gaming throughout the state presently. “As we sit here today, all forms of gaming are allowed under Massachusetts law,” he said.

Outside the courtroom, tribal chairman Tobias Vanderhoop said the hearing left him “very confident we were able to point out the flaws in the previous analysis of our position. And I’m very confident that our attorneys have effectively shown that IGRA applies, and that would be the appropriate outcome.” He added that the overarching message of the case goes beyond gaming. The case, rather, should affirm that tribal members have the right to make their own decisions, “to exercise a right as they see fit.”