Pentagon Orders Halt to Insider Bets on Military Outcomes

Defense Secretary Pete Hegseth issued a strict order on October 20 barring military personnel from using nonpublic information to place bets on prediction markets. The directive aims to stop adversaries from reading market signals to anticipate U.S. military actions. It covers all financial platforms, including traditional betting services and digital prediction markets like Polymarket and Kalshi.

The memo, sent to senior Pentagon leaders and Combatant Command heads, states that service members must not make financial transactions based on classified or unclassified military data. Hegseth argued that when personnel bet on specific outcomes, they create a financial signal. Hostile foreign intelligence services can then aggregate and correlate these signals to predict American targets and timing.

The directive follows a criminal case from April in which a U.S. Army soldier was arrested. The soldier was charged with using confidential information to make $410,000 in bets on Polymarket regarding the timing of the military's capture of Venezuelan President Nicolás Maduro. This case demonstrated the direct link between insider knowledge and financial gain in military contexts.

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. These accounts won a combined $8 million in profits. The report suggested that such activity could compromise operational security by revealing internal knowledge to the public through market movements.

Hegseth emphasized the operational risk in the memo. He wrote that the lives of service members often depend on the enemy not knowing what is coming next. The secretary added that troops who carry the flag into harm's way deserve a force that protects them, rather than one that exposes them to the enemy for personal gain. The order frames betting as a threat to sound judgment and operational security.

The memo was published by CBS News on October 22. It serves as a formal instruction to department leaders to enforce the ban. The goal is to ensure that personal financial stakes do not compromise military operations or put troops at risk. This move signals a tighter control over how military information is handled in the digital age.