Pentagon Memo Bans Military Bets on Prediction Markets to Hide Moves from Enemies

Defense Secretary Pete Hegseth has ordered military personnel to stop betting on prediction markets using inside knowledge. He warned that these wagers create a trail that enemy intelligence services can follow. The goal is to keep US troop movements and targets hidden from hostile countries.

The directive was sent in a memo dated October 20. The document was published by CBS News yesterday. It went to senior Pentagon leaders, Combatant Command leaders, and Defense Department field activity directors. The subject line of the memo was blunt. It read, 'Do Not Compromise Military Operations for Personal Financial Gain.'

Hegseth explained the risk in the body of the note. He stated that enemies watch for movements in these markets. When a service member or civilian makes a financial transaction based on a military outcome, they send a signal. Hostile foreign intelligence services can aggregate and correlate these signals. This allows them to anticipate US movements, targets, and timing. Hegseth noted that the lives of service members often depend on the enemy not knowing what is coming next. He argued that troops deserve a force that protects them, not one that exposes them for personal gain.

This warning follows a recent high-profile incident. In April, a US Army soldier was arrested. He was charged with using confidential information to place bets on Polymarket. The soldier wagered on the timing of the military's capture of Venezuelan President Nicolás Maduro. He reportedly made $410,000 from these bets. The case highlighted how nonpublic data could be turned into profit.

The issue is not limited to single individuals. An August report by the Anti-Corruption Data Collective found widespread activity in the sector. The group identified 152 suspicious wallets. These accounts placed longshot bets on military and defense markets. Collectively, these wallets won $8 million. The findings suggest a pattern of insider activity that concerns defense officials.

The new rules apply broadly. The memo states the prohibition covers all financial platforms. This includes traditional betting services and prediction markets like Polymarket and Kalshi. Defense Department personnel are banned from making any financial transaction if it is informed by nonpublic information. The rule applies whether the information is classified or unclassified.

The memo aims to prevent judgment from being warped by the desire for profit. By treating the market as a potential leak, the Department of Defense hopes to secure its operational advantage. The policy sets a clear boundary between personal finance and military duty.

Moving forward, military leaders must enforce these guidelines. Personnel will need to review their trading activity and ensure no nonpublic data influences their bets. The Department expects this measure to reduce the risk of intelligence leaks through financial markets. The focus remains on protecting the force and maintaining operational secrecy.