Pentagon Bans Bets on Military Outcomes After $8M in Suspicious Wagers
Defense Secretary Pete Hegseth issued a strict memo to prevent service members from using nonpublic information to profit from prediction markets, citing risks to operational security.
By Brianna Jackson ·
The US Department of Defense has tightened its rules on financial activity among military personnel. The new guidance aims to stop service members from using inside knowledge to profit from betting platforms. This move follows growing concerns that these wagers could reveal sensitive military plans to foreign adversaries.
Defense Secretary Pete Hegseth sent the directive in a memo dated October 20. The document was distributed to senior Pentagon leaders, Combatant Command heads, and field activity directors. The subject line of the memo read, “Do Not Compromise Military Operations for Personal Financial Gain.” The rule covers all financial platforms, including traditional betting services and newer prediction market sites.
The ban applies to any transaction based on nonpublic information. It does not matter if that information is classified or simply unclassified. Personnel are prohibited from making financial moves informed by details not available to the general public. This includes sites like Polymarket and Kalshi, which have seen a surge in activity related to geopolitical events.
Hegseth argued that these markets act as a signal for enemy intelligence services. He noted that hostile foreign agencies monitor movements in these platforms. When a service member or civilian makes a bet on a military outcome, it creates a data point. Adversaries can aggregate and correlate these signals to predict US movements, targets, and timing.
The memo emphasizes the high cost of such leaks. Hegseth wrote that the lives of service members often 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 for personal gain. The guidance seeks to ensure that personal financial interests do not override operational security.
Recent incidents have highlighted the risks associated with these platforms. In April, a US Army soldier was arrested and charged with a specific offense. He allegedly used confidential information to place bets on Polymarket. These wagers concerned the timing of the military’s capture of Venezuelan President Nicolás Maduro. The soldier reportedly made $410,000 from these trades.
Other data points have raised further alarms. An August report by the Anti-Corruption Data Collective identified 152 suspicious wallets. These accounts placed longshot bets on military and defense markets. The group calculated that these wallets won a combined total of $8 million. This finding suggests that a small group of insiders may be systematically exploiting market inefficiencies.
The stakes are high for the entire defense sector. The new memo aims to close a perceived gap in security protocols. By restricting access to nonpublic information in financial transactions, the department hopes to reduce the signal-to-noise ratio for foreign observers. This approach aims to preserve the element of surprise in future operations.
Source: Ars Technica
