The following information comes from some reliable sources for Batman-on-film. They claim that the the movie will be set in Arkham Asylum.
"Many, if not most, members of Batman's rogue's gallery will be making
appearances in the film. It's going to be crammed with Bat villains,
which means that just about every major bad guy you've ever wanted to
see in a movie will be in this movie. According to my sources Affleck
and Geoff Johns, who has been working with him on the film, want to make
the definitive Batman film. They want to tell the ultimate Batman
story, and to do so they're going to bring in all the big guns. They're
going to have a big, sprawling Bat universe already in place."