Washington — Defense Secretary Pete Hegseth has banned Defense Department personnel from using nonpublic information to bet on U.S. military operations, according to a memorandum obtained by CBS News.
In the Oct. 20 message to senior Pentagon leadership and combatant commanders, Hegseth said the prohibition would apply to classified and unclassified information and specifically includes prediction markets such as Polymarket and Kalshi, which are named in the memo.
The defense secretary warned that financial transactions on prediction markets could expose sensitive military movements to foreign adversaries and endanger American troops.
"Make no mistake why this matters. Our enemies watch movements in these markets," Hegseth wrote. "When an American Service member, intelligence professional, or other Department civilian engages in a financial transaction on a military outcome, they create a signal."
Hegseth warned that foreign intelligence services could analyze betting activity to anticipate American military movements, targets and timing of an operation. The memorandum said violations could result in administrative disciplinary or criminal action under federal law or the Uniform Code of Military Justice, the laws and regulations governing the U.S. military.
The directive follows growing scrutiny of service members participating in military-related prediction markets. In April, a U.S. Special Forces soldier involved in the military operation that captured Venezuelan leader Nicolas Maduro was arrested after allegedly betting on Maduro's removal from office before news of the raid was made public.
Federal investigators believe U.S. Army Master Sgt. Gannon Ken Van Dyke made bets of more than $33,000 on the prediction market Polymarket within hours of President Trump's announcement in January that Maduro had been captured. The bets resulted in winnings of more than $409,000.
The soldier entered a not guilty plea in New York federal court.
