Gold Saucer - Battle Arena

At the Battle Square in the Gold Saucer, you can test your fighting skills against a variety of opponents. Each time you enter you must pay 10 GP. Only a single fighter can participate and will fight up to 8 battles in a row with all damage and effects from each round carrying over to the next one. At the end of each round, you're given a random slot effect that applies at the beginning of the next round:

All Materia BrokenEffect is as if all your materia are unequipped
Command Materia BrokenEffect is as if all your yellow materia are unequipped
Independant Materia BrokenEffect is as if all your pink materia are unequipped
Support Materia BrokenEffect is as if all your blue materia are unequipped
Summon Materia BrokenEffect is as if all your red materia are unequipped
Magic Materia BrokenEffect is as if all your green materia are unequipped
MiniMini is cast on you at the beginning of the next round
FrogFrog is cast on you at the beginning of the next round
PoisonPoison is cast on you at the beginning of the next round
SpeedYour battle turn gauge charges at half speed
Sword BrokenEffect is as if your weapon is unequipped
Armor BrokenEffect is as if your armor is unequipped
Accessory BrokenEffect is as if your accessory is unequipped
Item Command SealedYou can no longer use items
1/2 HPYour maximum HP is cut in half
1/2 MPYour maximum MP is cut in half
1/2 HP & MPYour maximum HP and MP are cut in half
Zero MPYour maximum MP is set to 0
10 Levels DownYour level is reduced by 10
5 Levels DownYour level is reduced by 5
Time x30 DamageYou take damage equal to 30 times the amount of time on your gauge at the end of the round (if this is more than your current HP, reduces your HP to 1)
CureYou are restored to full HP at the beginning of the next round
Lucky 7No effects

The amount of Battle Points you earn depends on the severity of your handicaps and the number of rounds you won. You can quit after any round. If you beat all 8 rounds you're given the Tissue consolation prize. Once you have accumulated enough points you can trade them in for some items at the prize counter here:

PrizeBP
Remedy100
Enemy Lure250
Right Arm500
Pre-Emptive1000
Reagen Greens2000
Speed Plus4000
Stardust8000
Championship Belt16,000
Omnislash32,000
W-Summon64,000

Once you have obtained Omnislash and W-Summon you'll have the option to enter the Special Battle. The opponents are much harder and the amount of BP you get remains the same, however if you beat all 8 rounds, you get the Final Attack as a prize.