Medieval Moments is a stadium where the joust was held in the episode "Dunces and Dragons." SpongeBob and Patrick are forced to joust and are thrust back into the past to the medieval times. It appears to be run by Morrie.
On the outside, it looks like a castle. It has a wooden door and a moat.
On the inside, it looks like a stadium.
Later, the Chum Coliseum will feature gladiator events, much like Medieval Moments did, except Medieval Moments has jousting events.
Medieval Moments is a reference to the real life dinner theater Medieval Times.
It is unknown why the interior looks larger than the exterior.