When you bet, how exactly does it work?

My brother told me that if you put a bet of �1 on (say) a 3/1 bet and win, you'll get �3 + your money back = total �4. I told him that you will get �3 but no money back. That's how I've always seen it. I tried to make the point if there was a team well on to win and the odds would be something like 1/10, then you could easily put a hundered pounds down and get a �10 therefore losing �90. But in his eyes, you would get �110 which is ridicilous - all the bookies will go bust because they're losing money. I'm right, surely?