The Blood Pits are the coliseum of Gemcradle, the capital of Aurumhold.
History
Slavery was legal in Aurumhold until the current Sultana, Lirien Gemheart, banned all slavery nationwide. Before then, the Blood Pits were fought by slaves, some of whom earned their freedom with their winnings. Bernard Callborn, now the leader of the Dawnblades, fought there as a slave. Sultana Lirien first met him there as a girl, when her father would take her to watch the fights. After his most impressive fights, Bernard would be brought to the palace, where the two came to know each other more closely.
The Blood Pits today
The coliseum still runs, but now with free fighters who are paid to compete. It has become something like a sporting event. Craftsmen pay fighters to use their weapons, armor or magic items in the fights, to advertise their skills.
Fading support
The Blood Pits are still popular, but they are slowly losing financial support from the guild masters, who aren't making as much money now that they have to pay the fighters.
It is an open secret in Gemcradle that the guild masters, as a group, want slavery brought back to make the coliseum more profitable. Individually, they are careful never to say so in public.