So about the setting. Lugubrious' RP is quite complex and multiverse-ish, for lack of a better word, but I would enjoy doing something more grounded for this one. You mentioned gothic fantasy, which I like a lot as well.

The premise could be something like this: Between wars, malevolent magic and supernatural monsters, most of the world has gone to shit. Most people struggle to survive in the fantasy equivalent of a post-apocalyptic wasteland. But one city stands tall and uncorrupted among the rubble. To keep the population pure, only the truly great may enter this city. Thus, from time to time, a tournament is organised, giving the most skilled and most gifted outsiders a chance to prove themselves worthy of entering. Of course, none of the contestants know first-hand what the city is like on the inside, which can be an additional source of conflict. [sub]Wait, did I just describe the plot of the Hunger Games?[/sub]

Or if you want to go really dark: An ancient lich must feed on powerful souls to sustain himself, but his body is too worn away and decrepit to seek them out. Thus, to satisfy his need for both souls and sadistic entertainment, he organises a tournament. The ultimate winner will have their greatest desire granted to them, within the limits of the lich's powerful magic. The losers become fuel for the lich's own withered soul. (Obviously, this means every fight would be lethal, which we may or may not want.)