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In a parimutuel market, bettors do not wager against a house or a counterparty quoting fixed odds. Instead, every stake goes into a shared pool. When the market resolves, winners divide the pool in proportion to how much they staked on the correct outcome, after a small protocol fee. The key implication is that your return is not set when you bet, it is determined by the final composition of the pool at close.

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How the pool works

Every market on counsel has a dedicated pool account on the XRP Ledger. When you send a Payment to that account, your funds enter the gross pool. Each outcome maps to a DestinationTag, so outcome 0 (“Yes”) and outcome 1 (“No”) accumulate in separate sub-pools within the same account. At resolution, the fee is deducted from the total pool, then the net pool is divided among winning-side stakers pro-rata by their individual stake.
1

Stake

Your XRP Payment reaches the pool account, tagged to your chosen outcome.
2

Pool accumulates

Every bet across all outcomes adds to the gross pool. The implied odds shift continuously.
3

Betting closes

Once bet_cutoff passes, the pool is frozen. No new bets are accepted after this point.
4

Resolution

The winning outcome is determined. The fee is applied and winners are paid.

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Odds are indicative until close

Because any new bet changes the pool distribution, odds are never firm until bet_cutoff passes. Two values are useful for evaluating a position at any given moment: 
implied_prob      = outcome_pool / total_pool
payout_per_unit   = net_pool / outcome_pool
implied_prob tells you what fraction of the total money is on a given side. payout_per_unit is the multiplier you would receive if that side wins, after the fee. Both numbers move with every new stake on any outcome.
Odds displayed before bet_cutoff are indicative. The pool can shift materially between the time you see a quote and the time your transaction confirms.

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Anti-slippage: projected_implied_odds_after

Before you sign a bet, the bet-intent endpoint computes how your own stake moves the line. The response includes projected_implied_odds_after: the implied_prob and payout_per_unit for your chosen outcome after your stake is added to the pool. This is the closest thing to a pre-trade quote counsel can provide. 
{
  "outcome": 0,
  "amount_xrp": 10,
  "projected_implied_odds_after": {
    "implied_prob": 0.624,
    "payout_per_unit": 1.555
  }
}
Check this number before signing. A large bet on a thin pool will meaningfully worsen its own odds.

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Odds are final at close

Once bet_cutoff passes, no new bets are accepted. The pool state at that exact moment, the drops on each outcome, determines the final payout_per_unit for every bettor. There is no further price movement after close.

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Worked example

Consider a 100 XRP market with 3% fee (fee_rate: 0.03):
OutcomePoolImplied ProbNet PoolPayout/Unit
Yes (0)60 XRP60%97 XRP97 ÷ 60 = 1.617×
No (1)40 XRP40%97 XRP97 ÷ 40 = 2.425×
  • Gross pool: 100 XRP
  • Fee (3%): 3 XRP
  • Net pool: 97 XRP
A bettor who staked 10 XRP on Yes would receive 10 × 1.617 = 16.17 XRP. A bettor who staked 5 XRP on No would receive 5 × 2.425 = 12.125 XRP. The house takes 3 XRP regardless of which side wins.
Individual payouts are floored to the nearest drop (1 XRP = 1,000,000 drops). Rounding residue (dust) accrues to the operator reserve rather than being distributed.

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Parimutuel vs. fixed-odds

Parimutuel (counsel)

You bet against other bettors. Odds are set by the market. The house takes a fixed fee regardless of the outcome.

Fixed-odds bookmaking

You bet against a bookmaker who quotes and guarantees a price. The bookmaker absorbs the risk of a lopsided book.
On counsel, the protocol is never exposed to outcome risk. The fee is the only revenue, and it is deducted from the pool before any split.