Pentagon Bars Personnel From Using Military Secrets to Bet on Prediction Markets

US Defense Secretary Pete Hegseth has told Pentagon staff they may not use undisclosed information to place wagers on coming military action, including on prediction platforms such as Kalshi and Polymarket. In a memo sent Tuesday to senior leaders and defense agencies, he prohibited all Department of War personnel from making financial transactions based on nonpublic information, whether classified or unclassified. Hegseth warned that adversaries watch these markets, writing that service members’ lives often depend on the enemy not knowing what is coming.

Why Financial Stakes Threaten Military Judgment

Beyond operational security, Hegseth argued that money on the line can distort decisions. He said a logistician with a bet on a strike date has a stake in that date, and an analyst holding a position on an outcome has an interest in seeing it happen.

Earlier Insider Betting Cases Behind the Directive

The rule follows an April indictment of US Army soldier Gannon Ken Van Dyke, who allegedly used classified details of the operation to capture Venezuelan leader Nicolás Maduro to win more than $400,000 on Polymarket. Prosecutors say he helped plan and carry out the mission, then bet on outcomes tied to Maduro’s removal. He has pleaded not guilty. In February, Israeli authorities also indicted a military reservist and a civilian for allegedly using classified information to bet on Polymarket about Israeli strikes on Iran.