Secretary of Defense Pete Hegseth has banned military personnel from using non-public information to bet on U.S. military operations through prediction markets like Polymarket or Kalshi.
A Pentagon memo sent to senior military leadership said the prohibition applies whether the transaction uses classified or unclassified information.
“Our enemies watch movements in these markets. When an American service member, intelligence professional, or other [Defense Department] civilian engages in a financial transaction on a military outcome, they create a signal,” Mr. Hegseth wrote in the Oct. 20 memo.
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“That signal can be aggregated, correlated, and exploited by hostile foreign intelligence services to anticipate our moments, targets and timing,” he said.
A U.S. Army special forces soldier was indicted in April on charges of using classified information about the capture of Venezuelan leader Nicolas Maduro to make more than $400,000 on a prediction market. Master Sgt. Gannon Ken Van Dyke pleaded not guilty and was released on bond.
In the memo, Mr. Hegseth called the use of prediction markets to bet on military operations “a dilution of the warrior ethos this department has strived to eradicate under this administration.”
“We are restoring lethality, discipline, and singular focus on fighting and winning our nation’s wars, and nothing should distract us from that sacred mission. Not entertainment. Not a payout,” he wrote.
Violations could result in administrative discipline or, when appropriate, a criminal prosecution under the Uniform Code of Military Justice or federal law, officials said.
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