Well shit, this blew up fast lol. I really do appreciate the answers I've received here so I'm gonna make up a scenario.

March 21st Baylor and Notre Dame are playing a Game in the NCAA tourny. So assuming there's a 10% vig, I need to put $1,100 down if I want to win $1,000. So say I win I get a total of $2,000 back because of the 10% Vig.

Now say I'm a bookie playing the same game and I've got bets on both teams. $2,000 on Baylor and $4,500 on Notre Dame. I'd contact another Bookie and send him some of that $4,500 so that I won't be having to pay out of pocket.

On the aspect of losing and paying an extra 10% is that collected in person after the game or taken from the original bet? Like for example guy A bets $1,100 on one team and guy B bets $1,100 on the other team. Guy A loses his bet so he gets another $100 taken off his original $1,100 making it $900 in total and the $900 goes to Guy B?