The arena has three different difficulty levels, each one with a set of prizes to choose from, and you have to pay an entrance fee to Halvar before you can fight
Greenhorn: easy level, the entrance fee is 1,000 gp
Scrapper: medium level, the entrance fee is 5,000 gp
Warlord: hard level, the entrance fee is 10,000 gp
You can fight every difficulty level as many times you want, but you only can get the prize once per difficulty level
After you win all ten battles, you will be teleported to the prize rooms when you enter the west teleporter of the last pit. Go north, and go into the prize room for the difficulty level you fought where you can get a trophy and choose one of five prizes. The exit is south of the prize rooms.