There already exists at least one decentralized prediction market, Augur (based on Ethereum). Unlike centralized ones, anyone can make a contract about literally any future hypothetical event and then make a market in it.

This can easily be used to create so-called "assassination markets" (a Googleable phrase, not my own).

You could simply create a market like "Will so and so die before such and such date?" Then you place a massive bid order at 99.99% odds. Any would-be takers would then have to put up say $1, go out and kill the person before the specified date, and now they're sitting on tokens that are worth $10,000, because the market will resolve to "true."

The author talks about that in the latter half of the article, they just pay them hoping they get what they paid for even though there are clear signs of it being a scam.