Thanks for taking the time to consider my request. Others can feel free to weigh in, but I think betting on combatants you think will will and letting the dynamic combat determine the outcome is much more fun and organic. Even a Lord in resplendent armor can be bested in a 2v2 match if their companion takes a crossbow bolt to the head too early in the match.
I've never much cared if the arena was lucrative, just that it's a fun part of the game. I think it would be fun and interesting if you had a spectator player character in the stands, cheering and throwing rotten produce or coins into the ring to effect the outcome. I'm wary of feature creep though. I feel like just observing like you currently do in the arena once you're knocked out, but with the added UI element of betting on NPCs instead of yourself is a nice bite-sized addition that would bring some value for players of the single player campaign who elect to let others fight for them.