Pentagon Orders Troops to Halt Wagers on Classified Military Events

Defense Secretary Pete Hegseth issued a directive on October 20 prohibiting military personnel from using nonpublic information to place bets on prediction markets. The order, dated October 20 and published by CBS News on October 22, warns that such financial transactions can reveal strategic details to foreign adversaries. The memo was sent to senior Pentagon leaders, Combatant Command heads, and directors of Defense Department field activities.

The directive specifically targets the use of classified or unclassified nonpublic information for personal financial gain. Hegseth stated that enemies track activity in these markets to anticipate American movements, targets, and timing. He wrote that when a service member, intelligence professional, or civilian makes a financial transaction tied to a military outcome, they create a signal that hostile intelligence services can exploit.

The memo covers all financial platforms, including traditional betting services and prediction markets such as Polymarket and Kalshi. Hegseth emphasized that the lives of service members depend on the enemy not knowing what is coming. He argued that troops deserve a force that protects them rather than one that exposes them to the enemy for personal financial benefit.

The order 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. These wagers focused on the timing of the military's capture of Venezuelan President Nicolás Maduro. The case served as a primary example for the department's new guidance on insider trading risks.

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. Those wallets won a combined $8 million. The report cited by the memo indicates that these patterns of activity pose a tangible threat to operational security.

Hegseth framed the betting ban as a measure to preserve military judgment. The directive instructs commanders and department leaders to ensure that personal financial stakes do not compromise operations. The memo serves as a formal warning that financial incentives must not interfere with the execution of military tasks or the safety of personnel deployed in the field.