Since we are not doing real-time PvP (and probably could not and should not on a mobile game), I would suggest making your arena rank/payout the highest level that you attained during the day. Payout can still be at 6pm local time.
This would eliminate what I frequently hear as the largest complaint in arena: it is a real hassle to time your arena run at a specific time of day when life is usually quite busy.
Making this change would maintain the integrity of the ranking system but allow players to do PvP battles when it is convenient and not be penalized for the specific time of day when they do their run. I know that would make my gameplay experience much more enjoyable.