This is just dumb. Who gets sued the first time someone dies or gets critically injured? The police officer? The city for allowing it? The establishment that owns the property?
Encouraging public violence, even in a controlled environment, is setting a bad example as well. The people doing the shooting aren't going to be the ones doing this. It'll be a bunch of tough-guy idiots looking for an audience.
Isn't that the point? The only one that could be sued is the guy you agreed to let kill you...