It's basically 'betting'
Betting odds represent the probability of an event to happen and therefore enable you to work out how much money you will win if your bet wins. As an example, with odds of 4/1, for every £1 you bet, you will win £4. (Source: google.com)
As in toribash, it's like you're placing your money (tc) in one of the fighter on the ring and if your fighter won against the opponent you'll get your money back plus some extra if someone bet on the losing one. It's basically like that.