Pentagon bans personnel from using insider information for prediction market bets

Defense Secretary Pete Hegseth has issued a directive prohibiting Department of Defense personnel from using nonpublic military information to place bets on online prediction markets, such as Polymarket and Kalshi. The memo, titled “Do Not Compromise Military Operations for Personal Financial Gain,” applies to both uniformed troops and civilian employees, covering both classified and unclassified information.

The directive aims to mitigate security risks, noting that financial transactions based on military outcomes can create signals that hostile foreign actors can aggregate and exploit. Hegseth emphasized that such actions jeopardize operational security and the lives of service members.

The policy follows several high-profile incidents involving military-related wagers. This includes a U.S. Army Special Forces master sergeant accused of winning over $400,000 by betting on the removal of Venezuelan President Nicolas Maduro. Additionally, concerns were raised regarding wagers placed on U.S. strikes against Iran and the rescue of an airman during Operation Epic Fury. Violators of the new directive may face disciplinary action under the Uniform Code of Military Justice or federal criminal prosecution.