Not much is known about Otho, other than him being sexist, as Caesar says, women are beneath notice.
He saw the Legate fight when he was only a recruit, indicating he has been in charge of the arena for some time.
Otho will not let you fight in the arena if your character is a woman. No exceptions. However, if you are male, he will let you fight increasingly difficult enemies. After these are completed Otho will tell you that nobody is brave enough to fight you. He also sets up the fight between you and Benny, if you choose to kill him that way.
There is a special low intelligence dialogue option with him.