I suspect you are thinking of Chaotic.
Chaotic tells the tale of a teenage boy named Tom and his friend Kaz. They both play the Chaotic Trading Card/Online Game. Kaz always tries to tell Tom about a secret code to play for real which Tom refuses to believe. While playing online Tom receives the special password. When he enters the password into his game scanner he is transported to a place called Chaotic that is able to take him to another world where the characters, locations and items in the card game came to life.
There are two parts to the Chaotic world, Chaotic itself and Perim. Chaotic is where the people play an advanced version of the card/online game where they transform into the creatures. The games can be watched via monitor by other players.
The second part is Perim. In Perim the creatures, locations and items from the game are real. Players from the Chaotic game can teleport into Perim and scan the locations, creatures and items with their scanners, gaining the ability to use them in their game. There are four tribes in Perim. Two tribes, the Overworld and the Underworld, have been at war over a great power called the Cothica. Despite their names, there is no definite good and evil tribe, as both have different stories and interpretations of how the war began, with each tribe seeing the other as being evil. The Danians and Mipedians have since joined the war, turning it into a four-way conflict over the Cothica. It is said that the Mipedians were once united with the Overworlders and the Danians united with the Underworlders. It is still unknown why they separated.
You may be looking for Episode 19, "A Fearsome Fate":
Tom finally has a new scan of Maxxor, but when he transforms into the awesome OverWorld leader during a Drome match, he makes a startling discovery – the once-brave warrior is now a quivering coward. Seeking to unravel the mystery of Maxxor's illness, Tom must 'port to Lake Ken-i-po to consult with Najarin – if he can survive the Mugic trap inside the old wizard's castle.