Challenge sounds like something people would enjoy, so why not?
The Tournament Place east of Olde Yorke and the smaller one near Durmandle are both flagged Arena, so either would work.
However I suggest we use something less common than yes and no, to avoid mistakes.
For instance 'I accept'.
And I agree that the default should be to refuse. Idling at recall is all too common.
On the other subject I'd REALLY like to see a ARENA_VIEWING_ROOM system implemented. There is a Spectactor's gallery next to the Gladiator Arena, so why not try it there? I suppose it would be awfully spammy if several persons are fighting at the same time, but maybe there is a way to choose what player to 'follow'? *pokes Once*