The Champion's Seal is a trophy in Fable and Fable: The Lost Chapters that you gain upon completing the The Arena quest. Jack of Blades claims that he made it able to track you and that is how he finds you sneaking Scarlet Robe out of Bargate Prison, even if you hung it in your house.
Description[]
"The Arena Champion's Seal is a respected symbol across all of Albion. Only the most powerful of Heroes and brave warriors have earned the right to carry it."