Potentially, however if two people of lets say 100k each were to duke it out with pure pinks...well then you have an even match. People would be able to battle people of their level and if they don't want to bet they can do a friendly to practice.
Poorer people will not bet in the beginning thats true, but let the person win a few rounds and make a quick 5 or 10k then that person will be hooked.
The dynamics would be simple;
Farm to PVP
if GOOD (winning)
PVP for Money
if BAD (losing)
Farm to PVP
The good thing would be you could practice 1v1 for free and when you are ready to move this to the next level, start by small wagers of 1000 gps or so and work ur way up.
Some people are good pvpers regardless of gear. IF they find people that are at the same 'gear level' as they are they could easily bank.
And in terms of 'Where I got the Idea from'
I got the idea originally from the Dueling pits in Ultima Online however added the wagering system because here a lot of people always say "Wanna bet!"
In Ultima Online all you had to do was type "I wish to Duel" and you could select the player, you'd be instantly teleported to the Dueling Pits.
But in Ultima there were only like 8-9 pits, so if they all were occupied you couldn't duel until they are free. I would not do this on AL however, I'd make it a 1v1 room. Still would be good to be able to have spectators though and the way you'd do that is by creating X amount of rooms to fight in. Still, I don't know if the people at STS is paying attention to this...if they were to do this I'm sure that the entire PVP section of Arcane Legends would be greatly appreciative of their actions.
I have seen a lot of other ideas in PVP I love but think won't happen due to the cross platform game, mobile users can't 'yet' enjoy massive battles since it will freeze up. That makes Guild wars difficult. However 1v1s should not do anything to make their games any slower.
Anyhoo, thanks all for the input. If you have some more ideas or other crap you'd like to add to this idea...by all means drop them here on the thread.