I would agree with a max x3 multiplier, and a -1 multiplier per defeat.
Less random facors, less whining from people getting switched to loose just after getting a x4 for the first time, less difference between the lucky bastards (x5,x1,x1,x1,x2,x3,x4,x5,x5,x5) and the unlucky ones (x5,x1,x2,x3,x1,x2,x3,x1,x2,x3), though in this configuration, they have the same amount of victories. -_-
The actual system, with already the upkeep and all, is way too much luck based. upkeep is fine, since gold isn't difficult to earn. But xp is another story.