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- Speak to Ignatius Flaccus in Godsreach.
- Collect 10 pieces of scrap metal.
- Collect 3 Dwemer cogs.
- Bet on the match between the two robots (you can only bet once).
In the basement of the Ignatius Manor in the Godsreach District you will find Ignatius Flaccus standing next to his Robot Arena. Unfortunately, all his robots are currently broken and he wants you to find 10 pieces of Dwemer scrap metal in order to repair them. If you haven't explored the Dwemer ruins Bamz-Amschend in the Main Quest yet, you can go buy them all from Nalcarya of White Haven in Balmora.
Return to Ignatius with the 10 pieces of scrap metal and he'll ask you for three rusty Dwemer cogs. Head back down to the Dwemer ruins again. In Bamz-Aschend, there are a number of cogs in the northeast corner of the Hall of Winds, just off the entrance to the ruins. They are quite heavy at 50 each, so those weaker characters might need to make a few trips or, better yet, cast Mark at the Robot Arena and grab all the cogs in one fell swoop.
Return to Ignatius with the three cogs and he'll thank you, telling you to return in a little while once he has time to repair the robots. In fact, you can leave and return immediately and the robots will be ready. Speak with Ignatius to start a fight and even bet on the outcome. If you decide to, you may wager 50, 250, or 1000 septims. The steam centurion usually wins, so that's your safest bet. Once the fight is over, you cannot bet again on a new fight.