Pentagon Memo Bars DoD Staff From Wagering on Secret Military Events

Defense Department employees can no longer use nonpublic information to place bets on prediction markets. A memo from Defense Secretary Pete Hegseth, dated October 20, prohibits staff from making financial transactions based on classified or unclassified military details. The directive aims to stop adversaries from using market activity to track American military movements.

The memo was sent to senior Pentagon leaders, Combatant Command heads, and directors of Defense Department field activities. CBS News published the document on October 22. Hegseth argued that hostile foreign intelligence services monitor these platforms. When a service member or civilian places a bet tied to a military outcome, they create a signal. Adversaries can aggregate and exploit that signal to anticipate U.S. targets and timing.

The ban applies to all financial platforms, including traditional betting services and prediction markets like Polymarket and Kalshi. Personnel are barred from any financial transaction informed by nonpublic information. Hegseth wrote that the lives of service members depend on the enemy not knowing what is coming. He stated that troops deserve a force that protects them rather than one that exposes them to the enemy for personal gain.

The directive follows a specific criminal case from earlier this year. In April, a U.S. Army soldier was arrested and charged with using confidential information to make $410,000 in Polymarket bets. The bets focused on the timing of the military's capture of Venezuelan President Nicolás Maduro.

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. The report highlighted the scale of suspicious activity in these sectors.

Hegseth's memo frames betting as a threat to operational judgment. The message to commanders is that personal financial stakes in military outcomes can compromise operations and put troops at risk. The memo instructs leaders to enforce the new rules across their respective commands.