Pentagon Chief Orders Troops to Halt Wagering on War Outcomes

Defense Secretary Pete Hegseth issued a directive on October 20 banning military personnel from using nonpublic information to place bets on prediction markets. The memo, titled "Do Not Compromise Military Operations for Personal Financial Gain," was sent to senior Pentagon leaders, Combatant Command heads, and Defense Department field activity directors.

Hegseth argued that financial transactions tied to military outcomes create a digital signal. He warned that hostile foreign intelligence services can aggregate and correlate this data to anticipate American movements, targets, and timing. The memo states that these services track activity in such markets to gain a strategic advantage.

The prohibition applies to all financial platforms, including traditional betting services and prediction market sites like Polymarket and Kalshi. Department personnel are barred from making any financial transaction informed by nonpublic information, whether that information is classified or unclassified. The rule aims to prevent personal financial stakes from compromising operational security.

The order follows a specific incident involving a US Army soldier. In April, the soldier was arrested and charged with using confidential information to make $410,000 in Polymarket bets. The wagers focused on the timing of the military's capture of Venezuelan President Nicolás Maduro. The case demonstrated how insider knowledge could translate into direct financial profit.

Concerns about the practice extend beyond that single arrest. An August report from the Anti-Corruption Data Collective identified 152 suspicious wallets that placed longshot bets on military and defense markets. Together, those wallets won a combined $8 million. The report suggested that these patterns could indicate coordinated insider trading rather than random speculation.

Hegseth framed the issue as a threat to the judgment of service members and their safety. He wrote that when a service member or intelligence professional places a bet, they create a signal that enemies can exploit. The memo emphasized that the lives of troops depend on the enemy not knowing what is coming next.

CBS News published the full text of the memo on October 22. The document instructs commanders to ensure their units understand the risks associated with market trading. Hegseth stated that those who carry the flag into harm's way deserve a force that protects them from exposure for personal gain.