[seleniumBubbles]

One of the best papers I've seen is Crime Markets: Non-Usefulness of Prediction Markets for Assassination and Crime: http://bitcoinhivemind.com/papers/6_Crime_Markets.pdf Summary:

> Some worry that censorship-resistant prediction markets will be used to encourage assassinations (and other crimes); this concern does not hold up to a sober examination. “Assassination markets” (AMs), as originally proposed by Jim Bell, are irreconcilably different from Prediction Markets (PMs). My experimental method for funding public goods with PMs has features which render it incompatible with crime. Furthermore, markets would generally present an excessively-complex, risky, and convoluted form of criminal financing. Truthcoin presents a (peaceful) alternative for accomplishing ideological goals, which features greater persuasiveness as well as lower cost. I conclude with a short discussion covering [1] recourse for those affected by AMs (of any kind), [2] features of Truthcoin designed to amplify the inherent impracticalities of AMs, and [3] the (necessarily relevant) total net effect of Truthcoin on political assassinations, general crime and general human welfare.

The linked paper does a thorough job of explaining this scenario, but to summarize: yes, in the absence of other market participants you might try to bet on low-probability events and make them happen. But because it's a public market, anyone can see the anomalous "predictions" you have made, and "free ride" on or even "front run" your position, including your accomplices (who can also sabotage you). On net, your position will be mostly consumed by arbitrage, your payout will be inconsequential compared to the capital required, and the probability "returned" by the market will remain accurate.