The really weird punctuation made it difficult to read, so you might want to fix that if you want other people to be able to read this with ease.
The moment when Tim impales Gary had some problems. It was very expected (to me, at least), and because of that, it was too brief. You should have extended that moment. For example, after the bell rung again, you could have had Tim call, "Oh, Gary? One more thing--Gary, where are you?" And then Gary would come out, and Tim would "cheerfully impale" Gary (he sees it as a job, after all, and you might want to stress that when he kills Gary; he's not being cruel, he's just being efficient). Gary probably would gasp and dribble blood before expiring, and Tim would calmly wipe his sword before continuing onto the battle with Trademark stealth.
This is very Kurt Vonnegut-ish. And, because of this, the backstory is bad (meaning, the situation is so ridiculous that explaining it in detail makes it only more ridiculous, which is not good). I found myself automatically skipping those paragraphs, and I had to make myself go back and read them.
The reader generally grasps that the war has become nothing more than a form of entertainment and amusement by things like tea-time, the dancing girls, and the vendors selling beer and whatnot. Explaining that war has become the official drinking sport before the vendors and dancing girls is not a good idea; you give away your punch-line before it happens. As some of the explanation is funny (such as the fridge part), you should be able to keep it, but there are parts that are not needed, and they turn the funny bits into a bogged-down backstory that doesn't do your story any good.
This paragraph, in particular, weighs everything down.
Quote:
To offset the high costs of paying soldiers countries entered into a league with the coliseum owners, distributing part of the revenue among the warring nations. Which, in more recent years had become quite a lot of money. Attendance had skyrocketed, and war was becoming a very profitable business. Some poorer nations entered into war alliances just for the purpose of raising money. Even those opposed to war still found time to make it out to the coliseum; after all, war was the official sport of drinking.
It has nearly no humor besides the fact that war's become a sport, and that fact is presented much more successfully with the dancing-girl-and-vendors-etc. Stating it beforehand horribly ruins the joke; stating it after the fact is just you repeating yourself.
This following paragraph, also, could and, in my opinion, should be condensed.
Quote:
Thus, the coliseum was built and now featured a six year waiting list for battle dates. This, of course, made fighting a full-scale war very hard to do, making most wars consist solely of a single battle. But this also made standing armies very unprofitable things; only a few larger nations kept an army at all. Most nations, instead, hired on large amounts of mercenaries a few weeks before a battle.
It tells neccesary info, but in a verbose and wordy manner. A verbose and wordy manner is essential in your narrative humor; it kills when you use it in a non-humorous section. I would suggest either cutting to the chase with it, or dispersing it somehow through the dialogue. Placing it after the fact of the dancing-girls-and-vendors-etc. would also help. You have to protect your jokes; this entire story is nothing but a satirical punck-line, and it is nothing without the humor. Protect the humor at all costs.