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BUFFALO, July 3 — A day after receiving federal approval, the Seneca Indian Nation opened a temporary 5,000-square-foot casino on Tuesday with 124 slot machines in downtown Buffalo.

The long-delayed move, which has been opposed by many business and political leaders here, sets the stage for a legal showdown over whether the tribe’s sovereignty gives it the right to run a casino on its nonreservation land here.

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Since its conception in 2002, the Seneca’s plan for a casino on a nine-acre plot here has been a lightning rod for those who contend that a gambling operation downtown, despite the city’s sagging economy, will stifle other kinds of development and inflict further harm.

Supporters, on the other hand, say the $125 million casino with a 100,000-square-foot gambling floor and restaurants will add hundreds of jobs and attract out-of-state gamblers to a beleaguered part of the city and complement other development plans.

The Seneca tribe already runs two casinos, one in Niagara Falls and another on its reservation south of Buffalo. The third casino, which is essentially a marker until the grander plan is realized, means that the Senecas have met the December 2007 deadline set in an agreement with New York State that lets the tribe run three gambling operations.

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In January, a federal judge ordered the National Indian Gaming Commission to reconsider its initial decision on the 2002 agreement. The agency confirmed its approval in a letter to the Seneca Gaming Corporation on Monday.

“It’s a great day for the Seneca nation, it’s a great day for the Seneca Gaming Corporation and it’s a great day for the City of Buffalo,” said a spokesman for the corporation, Philip J. Pantano. Opponents plan to return to federal court to challenge the tribe’s right to open the casino. They say that in giving its approval on Monday the federal commission misinterpreted a 1990 law that settled a long-running land dispute with the Seneca in upstate New York. One author of the law, the Seneca Settlement Act, said it was never intended to give the tribe the right to run casinos.

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“I think the National Indian Gaming Commission is dominated by pro-gambling interests,” said John J. LaFalce, a former Democratic congressman who helped write the law. “But it escapes the essential issue of whether the Seneca Settlement Act contemplated Indian gaming, which it did not. That’s an issue that has to be decided by the courts.”

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Indeed, a broad coalition of Buffalo’s political, business and cultural leaders plan to go to federal court next week to challenge the Seneca’s right to run a casino on its property in Buffalo.

“We are now poised to go to court without procedural impediments to discuss land status issues, whether it’s sovereign territory and whether it is Indian land,” said Joseph M. Finnerty, the lawyer who is coordinating the state and federal lawsuits opposing the casino. “We feel just as confident today that we are right on those issues and will win on these issues.”

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“I’d say to the patrons at the temporary casino, ‘Don’t get too comfortable,’ ” Mr. Finnerty said.

By Tuesday evening, the parking lot on the site was full. Inside the small, blue metal building bearing the word “Casino” in simple white lettering, the smell of cigarette smoke hung in the warm, muggy air of the single public room.

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One concession stand offered hot dogs, cold sandwiches and baked goods, but no alcohol was being served. Still, every machine was in play, with short lines at a few.

“It’s ridiculous,” said Loretta Tozzo of Buffalo, who spent about an hour at the slots. “You can’t breathe in there. They should have waited to open something better.”

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As she left, Mrs. Tozzo said she and her husband, Louis, were headed to Niagara Falls, about 20 miles away, to the Seneca-run casino there.