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 leaders and combatant commanders, Hegseth said the ban would apply to classified and unclassified information and would specifically include prediction markets such as Polymarket and Kalshi, which are named in the memo.
The defense secretary warned that financial transactions in forecast markets could expose sensitive military movements to foreign adversaries and endanger U.S. troops.
“Make no mistake about the importance of this. Our enemies are monitoring the movements of these markets,” Hegseth wrote. “When a U.S. service member, intelligence professional, or other Department civilian engages in a financial transaction that has a military outcome, they are creating a signal.”
Hegseth warned that foreign intelligence services could analyze betting activity to anticipate U.S. military movements, targets and the timing of an operation. The memorandum said violations could result in administrative sanctions or criminal prosecution under federal law or the Uniform Code of Military Justice, the laws and regulations governing the U.S. military.
The directive follows increasing scrutiny of military personnel participating in military-related prediction markets. In April, a US special forces soldier involved in the military operation that captured Venezuelan leader Nicolas Maduro was arrested after allegedly betting on Maduro’s impeachment before news of the raid became public.
Federal investigators believe U.S. Army Master Sgt. Gannon Ken Van Dyke bet more than $33,000 on prediction market Polymarket hours after President Trump announced Maduro’s capture in January. The bets yielded winnings of over $409,000.
The soldier between a not guilty plea in New York federal court.
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