  We study the $C^*$-algebra $C^*(\kappa)$ generated by the Koopman
representation $\kappa=\kappa^\mu$ of a locally compact groupoid $G$ acting on
a measure space $(X,\mu)$, where $\mu$ is quasi-invariant for the action. We
interpret $\kappa$ as an induced representation and we prove that if the
groupoid $G\ltimes X$ is amenable, then $\kappa$ is weakly contained in the
regular representation $\rho=\rho^\mu$ associated to $\mu$, so we have a
surjective homomorphism $C^*_r(G)\to C^*(\kappa)$. We consider the particular
case of Renault-Deaconu groupoids $G= G(X,T)$ acting on their unit space $X$
and show that in some cases $C^*(\kappa)\cong C^*(G)$.
