Approach the entrance of the throne room. An attempt to enter that location will fail.
Listen to the conversation with the Chancellor, now and exhaust all of the topics. From your interlocutor you will learn that audience with the bone master will be granted to you. Only after you defeat the current champion of the Arena. At this very moment the mission ends. And you will be granted 700 experience points and 3000 gold pieces. At the same time, a new main quest mission will unlock [The Toll of Kings].