It has--at the very least--strong thematic ties to Gamma World, if not more specifically, Gammaruaders.
Your winnings would allow you to buy upgrades so you could be more effective in battle and (hopefully) ascend to become champion.
What really sold my young brain on the concept though, was the manual. It had this awesome box art which included photographed (!) prop weapons. The marketing and packaging around the whole game was genius--they wanted you to feel like this was the real deal.
You can imagine how this would effect on an impressionable young lad, such as myself:
Monsters fighting monsters? Cool. Slick futuristic weapons? WAIT--THIS IS REAL? Sold.
Right click to enlarge images
Yeah, and a scuba tank. But...whaddya gonna' do?
Now I just need to track me down a copy of the manual so I can stat these up!