Head for the inn to the west and you'll find a Feathered Cap in another closet downstairs. Save your game at statue first then enter the nearby house to get a Magic Beast Hide from the closet downstairs. Take the time to explore the town before signing yourself up. Walk up to the counter and Veronica will notice the Rainbough being offered as prize for the champion.
Here is a town that takes pride in its annual masked martial arts tournament, as such it goes without saying that you're gonna have to be a part of it.
