Oblivion arena wasn't all that, but YEAH a "awesome!" arena would be great!

No, the gladiatorial tradition is Roman. Norseman sometimes sacrificed people in rituals and they definitely had duels, sometimes made prisoners fight each other, but not for entertainment like the Coliseum.

See above. Proving your strength at arms is one thing, killing for the entertainment of the masses is not honorable.

Of course in Skyrim you have the wolf pits where bandits are betting, that's appropriate I think.

I just wanna see it happen because of the new combat system making it entertaining for gambling. Also in Skyrim there really shouldn't be rules, like if I went werewolf it shouldn't be a big deal, the spectators would accept it.

And no armor you're required to wear, so then you bet on people, not teams

Where are you going to put the arena in skyrim? There is no place for it.