Hegseth orders Pentagon staff to halt wagers on military outcomes

Defense Secretary Pete Hegseth issued a directive on October 20 requiring military personnel to stop using nonpublic information to place bets on prediction markets. The memo, titled "Do Not Compromise Military Operations for Personal Financial Gain," was distributed to senior Pentagon leaders, Combatant Command heads, and directors of Defense Department field activities. CBS News released the document on October 22.

The order bans financial transactions made with knowledge of classified or unclassified military information. It applies to all financial platforms, including traditional betting services and prediction marketplaces like Polymarket and Kalshi. Hegseth stated that when a service member or civilian performs a transaction tied to a military outcome, "they create a signal." He argued that hostile foreign intelligence services can aggregate and exploit these signals to anticipate American movements, targets, and timing.

The directive follows a specific legal case that highlighted the financial stakes involved. In April, a US Army soldier was arrested and charged with using confidential information to place bets on Polymarket. The soldier wagered on the timing of the military's capture of Venezuelan President Nicolás Maduro and made $410,000 in profit. The memo notes that "The lives of our Service members often depend on the enemy not knowing what is coming." Hegseth added that troops deserve a force that protects them rather than one that exposes them for personal gain.

Data from the Anti-Corruption Data Collective indicates the issue extends beyond a single instance. An August report from the group identified 152 suspicious wallets that placed longshot bets on military and defense markets. These accounts won a combined total of $8 million. The report suggests that adversaries track activity in these markets, allowing them to correlate financial movements with operational changes.

The memo frames betting as a threat to military judgment. Hegseth warned that personal financial stakes in military outcomes can compromise operations. The directive aims to prevent a scenario where the pursuit of profit reveals strategic plans to enemies. By restricting wagers based on nonpublic data, the Pentagon seeks to reduce the signal noise that foreign intelligence services use to monitor US forces.