Hegseth Orders Pentagon to Stop Bets on Military Secrets

Defense Secretary Pete Hegseth has ordered military personnel to stop using private information to place bets on prediction markets. A memo dated October 20 instructs senior leaders to ensure no one trades on nonpublic defense news. The document was released to the public on October 22.

The directive targets all financial platforms, including Polymarket and Kalshi. Hegseth stated that any transaction based on nonpublic information creates a signal. He argued that foreign intelligence services can track these signals to predict US military movements and targets.

The memo warns that these trades can reveal operational details to enemies. Hegseth wrote that service members deserve a force that protects them rather than one that exposes them. The goal is to keep the enemy from knowing what is coming next.

This rule follows a criminal case involving a US Army soldier. The soldier was arrested in April for using confidential information to make bets. He won $410,000 by predicting the timing of the capture of Venezuelan President Nicolás Maduro.

An August report from the Anti-Corruption Data Collective found more evidence of this practice. The group identified 152 suspicious wallets that placed longshot bets on defense markets. These wallets won a combined total of $8 million.

Hegseth framed the issue as a threat to military judgment. He told commanders that personal financial stakes can compromise operations. The memo was sent to Combatant Command heads and directors of Defense Department field activities.

The ban covers both classified and unclassified information. Personnel may not make any financial transaction informed by nonpublic data. The rule applies to service members, intelligence professionals, and department civilians.