Answer:
Admit that they lost the bet
Explanation:
The options you were given are the following:
An idiom is a phrase that has a figurative, non-literal meaning. We can't conclude what this type of phrase means based on the meanings of individual words that make it up. Here, we have the idiom throw up the sponge. No one is literally throwing up sponges. This phrase means to give up a contest or to acknowledge defeat.
Based on this information, we can conclude that the dogs are fighting until the people who own them admit that they lost the bet.