Hunger Games MMO?

This is more of a generalized idea, really, as I just saw the movie and it struck me that some of what it was would make a good basis for an MMO:

12 Districts, i.e. 12 diverse factions to play as.

Hunger Games:  Potentially monthly arena combat

12 District areas, 12 distinct environments

The Capitol:  Known enemy to fight against

But to make this game really interesting would be a method in which to make the game more fun, though it would be a bit complex to implement.  Make the Hunger Games mandatory by lottery, and make it permadeath for anyone who dies in them.

Of course, if you have read up to this point (this excludes 50% of the population that might comment on this thread), you are likely wondering how you would go about putting in such an event and make it work correctly.  I have multiple ideas on this, which I am curious to hear opinions on (just please try to do more than say "This would be dumb or This wouldn't work")

A couple of ideas are on who would be in the lottery from each District.  I would say that this would apply only to active players (perhaps those who have logged on in the last 2 weeks or maybe longer).  Secondly, those who are notified would be by ingame first, cell phone if able, email or FB or however the primary contact is decided for those who are not ingame.  The player should then hit the accept button or send a text with "accept" back or whatever.

Then comes the time period until the games.  This would be the revision period, because not everyone would end up hitting accept and because those that hit accept might have decided to retract, so new people would need to be chosen.  Thus, then we have the games themselves, which would follow a certain implementation, of which I have some to offer as possibilities.

First Possibility:

The game is short, brief to the point of being several hours and introduces mechanics that would ensure players finish in that time frame, so that a clear victor is left.

Second Possibility:

Gameplay would be over a 24 hour or longer period and players would be vulnerable during that time that they logged out.  Although having cell phone apps that enable basic character interaction would be helpful here too.

Obviously, the first possibility makes the most sense.  Combat in this game should not be quick death, but rather fights that concentrate more on long-term strategies and quick wits.  Victors of the game would get all sorts of perks and benefits.  

These are just some basic ideas off the top of my head.  Of course, this sort of arena combat would be interesting in other types of games, not just a Hunger Games MMO.

Ideas?  Thoughts?