Seutonius passes over it quickly in his Life of Nero:
But he compelled four hundred senators and six hundred Roman knights, some of whom were well to do and of unblemished reputation, to fight in the arena. Even those who fought with the wild beasts and performed the various services in the arena were of the same orders. He also exhibited a naval battle in salt water with sea monsters swimming about in it; besides pyrrhic dances by some Greek youths, handing each of them certificates of Roman citizenship at the close of his performance.
There are a few accounts of it happening in addition to Seutonius', but the logistics and specifics are debated and not precisely known.
fyi there are a few comments on flooding arenas for naval battle reenactments in these threads
just mentions