They could make it extremely tough that even a level 81 character would have a tough time competing in. They could pit you up against 10 heavily armored warriors, throw in a bunch of dangerous animals, have certain traps where those boulders come tumbling into the arena, have fire circles on the ground etc. All sorts of major cool stuff.
It could be so friggin spectacular. And instead of going all boring like Oblivion where once you become champion you can only do battles with up to 3 wilderness animals once a week/month....you get to pick, find, recruit and train new Gladiators. Maybe you even get to take full charge of the Arena and it becomes like a business....and a home.
If you have ever seen the TV show Spartacus....like the character Quintus Lentulus Batiatus is. And just like Oblivion, you watch the fights aswell as take part in them. Be sittitng high above the Arena with your spouse and guards all around you.
Would make a great DLC expansion I think.

