Pete Hegseth bars Pentagon insiders from betting on war outcomes

Defense Secretary Pete Hegseth issued a directive on October 20 that stops military personnel from using nonpublic information to place bets on prediction markets. The memo warns that these wagers create signals that enemies can track and exploit.

The order applies to all financial platforms, including traditional betting services and specific prediction markets like Polymarket and Kalshi. Department personnel are barred from making any financial transaction based on nonpublic information, whether that data is classified or unclassified. The directive was sent to senior Pentagon leaders, Combatant Command heads, and the directors of Defense Department field activities.

Hegseth argued that hostile foreign intelligence services aggregate and correlate betting activity to anticipate American movements, targets, and timing. He wrote that when a service member or intelligence professional carries out a financial transaction tied to a military outcome, they create a signal. The memo stated that the lives of service members often depend on the enemy not knowing what is coming.

The directive follows a criminal case from April involving a US Army soldier. The soldier was arrested and charged with using confidential information to make $410,000 in Polymarket bets on the timing of the military's capture of Venezuelan President Nicolás Maduro. CBS News published the memo on October 22.

Concerns about the practice extend beyond that single case. 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. Hegseth framed betting as a threat to judgment, noting that personal financial stakes in military outcomes can compromise operations. He wrote that those 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.