An assassination market, at least the one we discussed, works like this - One or more people put up a bounty paid out on the death of someone. Anyone can submit a (sealed) description of the death. On death, the descriptions are opened — the one closest to the actual circumstances is paid the bounty.
One of my portfolio companies had information about contributors to these markets — I was told by my FBI contact when I got in touch that their view was the creation of the market, the funding of the market and the descriptions were all legal — they declined to follow up.