Pentagon bans staff from betting on secret military moves

The Pentagon has banned its workforce from placing bets based on secret military information.

Defense Secretary Pete Hegseth issued the directive in a memo dated October 20. CBS News released the document on October 22. The order targets senior leaders, Combatant Command heads, and directors of Defense Department field activities. It prohibits any financial transaction made with knowledge of nonpublic information, whether that data is classified or unclassified.

The ban applies to all financial platforms. This includes traditional betting services and prediction market apps like Polymarket and Kalshi. Hegseth argued that adversaries monitor these markets for clues. When a service member or civilian makes a bet tied to a military outcome, they create a signal, he wrote. Hostile foreign intelligence services can then aggregate and correlate that data. This allows enemies to anticipate American movements, targets, and timing.

The memo states that the lives of service members often depend on the enemy not knowing what is coming. Hegseth wrote that those who carry the flag into harm's way deserve a force that protects them. He contrasted this with a force that exposes them to the enemy for personal gain. The directive frames personal financial stakes as a threat to operational judgment. It warns that such stakes can compromise missions and put troops at risk.

This rule follows a specific incident in April. A US Army soldier was arrested and charged with insider trading. He used confidential information to make $410,000 in bets on Polymarket. Those wagers concerned the timing of the military's capture of Venezuelan President Nicolás Maduro. The soldier's case served as a catalyst for the new broader policy.

Concerns about the practice have grown beyond that single arrest. An August report from 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 $8 million. The memo uses this figure to illustrate the scale of the financial activity. It reinforces the argument that personal gain is driving operational risks.

The directive is now in effect for the targeted groups within the Department of Defense. It seeks to align personal financial behavior with the operational security of the military. By closing the gap between insider knowledge and market transactions, the Pentagon aims to reduce the signals available to foreign intelligence services.