But if the assassin remains anonymous after collecting the prize--which would be necessary for the system to work--how can the next assassin (or anyone else for that matter) be confident that the prize was really disbursed? It sounds like there'd be no penalty disincentivising the host organisation from simply keeping the prize money.
A few things. First, I don't think anonymity is normally an absolute requirement. The idea is that it's just betting on predictions, not a "prize". The number of participants merely following the market would tend to outnumber the actual assassins which makes it difficult to distinguish between them. Second, there would be enough edge cases in the market (elderly politicians like Castro) to enable participants to build confidence over time that the system worked. And lastly, it's ultimately just a futures market so the disincentive is the same as any other, reputation and continuing in business taking a cut of the trades, same thing that keeps Mtgox from taking the money and running.
The more difficult or impossible it becomes to effect change in out of touch, runaway central governments, mega corporations and the compounding of government corporatism with the intelligence/resource concentration capacity of such relationships it becomes increasingly necessary for such assassination marketplaces.
The US founding fathers deemed militia as capable of protecting the people from unfortunate threats to liberty. Dark mega entities will render militia lame as it is by nature coherent and easily targeted.
A people's CIA of sorts providing covert action will be among one of the only effective tools to check the powers of the ultra powerful.
By the way. I bet Kim Jong Il will meet his end on 2011.12.11. Pay me.