A competition was an inventive punishment, one that managed to split up the core group of the most proactive cultists and destroy their collective spirit. Ted was practically making it up as he went along, constructing entire games from scratch and observing them, making up new rules if he felt like the games were being played in an unfair way.
After all the intellectual trials had been completed and only the most deserving were left, Ted decided that he wanted some excitement to go with his cruelty. He wanted to see something physical - since everyone left in the games was male, he did not have to worry about not looking like a gentleman.