[Sai of Torrents]

A book that I read some years ago, I can't really remember too much about it but here are some points I do recall.

Magic is acquired via items or tokens I believe & kept in pouch or magic bag usually worn at the hip.
Duels were common & the winner usually took a spell as a reward.
There were multiple houses of magic, colour based if I'm not mistaken.
The protaganist fought in some grand contest where all the houses came together, in the end one of the masters of the houses freaks out & fights the general public (I want to say this characters name began with a Z).
There's mention of Planewalkers or Planestriders something to that effect.
I want to say the protaganist at some point forcefully reaches into a planewalkers magic pouch to procure a specific spell, this may or may not be my imagination due to a dim memory of the book.

That's all I can think of at the moment, hopefully someone will know this, thank you in advance.

Edit: I'd like to point out this all sounds similair to a Magic: The Gathering story, but I've researched all the storylines that I've been able to find to no avail thus far.

[Erfael]

The grand public scene of magic reminds me of Pug's display in Magician by Feist, but I don't remember enough of that to say whether anything else matches.

[Trellyc]

Like you said, it sounds like a Magic the Gathering story. Magic the Gathering: Arena (http://books.google.com/books?id=LDejGwAACAAJ&dq=isbn:0061054240) by William R. Forstchen fits the description perfectly.

[blake06]

The grand public scene of magic reminds me of Pug's display in Magician by Feist, but I don't remember enough of that to say whether anything else matches.

I read Magician just a few months ago, and while the public scene sounds similar, nothing else matches.