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I'm not sure if you know, but the "Death-Markets" have been illegally running in the underworld markets for 1000 years. Its deemed illegal by most governments.

I also thinks some prediction market got shutdown in 2014/16 due to same issues.

Are there incentive issues with death markets that specifically exclude murder/assassination/manslaughter/etc?

yes - one can make a bet on YES and eliminate that person. Its same like a hit job. Outsource we don't have that volume or liquidity yet, but there is abundant volume and liquidity. Bad actor can take advantage of that.

If homicide is excluded in the resolution criteria, then there's no payout for killing the person.

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