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How the Gulag System Works
When you are eliminated in the standard Battle Royale or Vanguard Royale game mode, you will be given a second chance to respawn onto the map by beating your opponent in the Gulag in a 1v1 situation. If you win the gunfight, you'll parachute your way back into the match.
After being sent to the Gulag, you'll either be immediately put into a 1v1 situation with another player or have to wait your turn. If you're waiting, you can spectate other players duking it out in the arena below you. You can also toss rocks to confuse and stun players in the arena.
Fight to the Death
Once the 1v1 starts, you'll have 15 seconds to kill your opponent. If neither of you kills each other, a flag will spawn in the middle of the arena that can be captured. The person that captures the flag wins the fight and will respawn. Make sure to keep a lookout for a white outline filling up around the flag icon to see if the flag is being captured.
If you win the Gulag, you'll spawn in with the weapon you won with, giving you a fighting chance of fending off enemies still lurking around Caldera. However, you'll lose all your perks, equipment, as well as some money.