Simple explanation:
In a betting room (mostly) when two players fight, you pick the one that you think will win. Then you type /bet <amount-of-tc-here> <username-of-the-player-you-think-will-win> ex: /bet 200 chrisfinne.
If the player you bet on wins and there were bets against him, you and whoever else bet for him split the tc (then there is house, etc that will take some of the tc winnings though blah blah.)
if you lose, you will get no tc in return.
If you are the one fighting and people bet against you and you go on to win, you will get a percentage of those toricredits.
tah-dah