When we say "beaten by x", the x is normally the margin of victory. It is also bad writing practice to say forty-seven when what is meant is "forty fish to seven fish". So assuming the writer is skilled at English, the interpretation "47 more fish" is much more likely. The use of the phrase "George subtracted his fish..." supports this interpretation.
While it could be interpreted as 40 fish to 7 fish, this is unlikely. The writer would be aware that "forty-seven" is a poor phrasing, and should avoid it. If this were the intended meaning, there are lots of ways the author could have made it clear.