Military Betting: Hegseth Bars Troops from Prediction Markets

Service members and Defense Department civilians can no longer use nonpublic information to place bets on financial platforms, according to a new directive from the Pentagon. The order aims to prevent military personnel from inadvertently revealing operational details to foreign intelligence services through their trading activity.

Defense Secretary Pete Hegseth signed the memo on October 20. It was distributed to senior Pentagon leaders, heads of Combatant Commands, and directors of field activities. CBS News published the document on October 22. The subject line reads, "Do Not Compromise Military Operations for Personal Financial Gain."

Hegseth argues that financial transactions tied to military outcomes generate distinct data points. He describes this activity as creating a signal that hostile foreign intelligence services can aggregate and exploit. By analyzing these patterns, adversaries can anticipate American movements, targets, and timing. The memo states that the lives of service members often depend on the enemy not knowing what is coming next.

The prohibition applies to all financial platforms. This includes traditional betting services and prediction marketplaces such as Polymarket and Kalshi. The rule covers any transaction informed by nonpublic information, regardless of whether that information is classified or unclassified. Hegseth wrote that those who carry the flag into harm's way deserve a force that protects them, not one that exposes them for personal gain.

The directive follows a specific incident earlier this year. In April, a US Army soldier was arrested and charged with using confidential information to make bets on Polymarket. The soldier wagered on the timing of the military's capture of Venezuelan President Nicolás Maduro. The successful bets yielded a profit of $410,000.

Broader concerns about the practice emerged in an August report by the Anti-Corruption Data Collective. The group identified 152 suspicious wallets that placed longshot bets on military and defense markets. These accounts won a combined total of $8 million. The report suggests that the issue extends beyond individual cases to a wider pattern of activity.

The memo frames betting as a threat to operational judgment. Hegseth tells commanders that personal financial stakes in military outcomes can compromise operations. The directive seeks to align financial behavior with operational security standards across the department. It requires leaders to ensure their personnel understand the risks associated with trading on military events.