Defense Secretary Pete Hegseth has issued a directive prohibiting Defense Department personnel from using nonpublic information to place bets on U.S. military operations. A memorandum obtained by CBS News details the ban, which extends to both classified and unclassified data and explicitly covers prediction markets such as Polymarket and Kalshi.
The Oct. 20 message, sent to senior Pentagon leadership and combatant commanders, warns that financial transactions on these platforms could expose sensitive military movements to foreign adversaries. Hegseth stated that betting activity creates signals that enemy intelligence services could analyze to anticipate American targets and operation timing. "Make no mistake why this matters," the secretary wrote. "Our enemies watch movements in these markets." He added that any Department member involved in a financial transaction tied to a military outcome generates a signal.
The memorandum outlines that violations may lead to administrative disciplinary measures or criminal action under federal law and the Uniform Code of Military Justice. The directive follows increased scrutiny of service members participating in military-related prediction markets.
This regulatory step comes after a specific incident involving a U.S. Special Forces soldier who was arrested for allegedly betting on the removal of Venezuelan leader Nicolas Maduro before news of the raid became public. Federal investigators believe U.S. Army Master Sgt. Gannon Ken Van Dyke placed bets exceeding $33,000 on Polymarket within hours of President Trump's January announcement that Maduro had been captured. Those bets resulted in winnings of more than $409,000. Van Dyke entered a not guilty plea in New York federal court.