A "battle royal" (also known as a smoker) is a general
brawl among several participants. In this case, they were all supposed
to be fighting blindfolded. In this case, young black men were brought
in to fight in a battle royal as part of an evening's entertainment for
"all of the town's big shots," who "were there in their tuxedoes."
Notice the different elements in this event:
The battle royal follows. After that, the white men put money on the floor for the black youths to pick up--but the mat turns out to be electrified.
Finally Ellison gets to speak. He tries to deliver the validictory speech he delivered at graduation, but is hindered by the blood in his mouth and the hoots of the men. He quotes from Booker T. Washington's "Atlanta Compromise" speech, which rings hollow in the context of the evening's events.
Notice that the only thing that gives these men a problem during the evening of booze, broads, and brawls is Ellison's use of the phrase "social equality" instead of "social responsibility." They can handle anything but this. "You've got to know your place at all times." And the place of blacks was inferior to whites. But only social equality could change the culture that produced the smoker. Note also the cost to the white men involved. They've become cruel to the point of finding humor in the humiliation and degredation of others. How can they have self-respect when they don't respect others? As in the anti-slavery literature of the 19th century, the anti-segregation literature of the 20th century identifies the costs of discrimination to the discriminators as well as to those discriminated against.