Hegseth Bans Pentagon Betting on Inside Information
The Defense Secretary has issued a directive prohibiting the use of nonpublic data for personal wagers.
By Noor Rossi ·
Defense Secretary Pete Hegseth has prohibited Department of Defense personnel from using nonpublic information to place bets on prediction markets or other financial platforms. The directive, issued in a memo dated October 20 and released publicly yesterday, warns that such activity creates signals that adversaries can exploit to anticipate military operations. Hegseth’s message emphasizes that protecting troop movements from enemy detection is a matter of life and death.
The memo was distributed to senior Pentagon leadership, Combatant Command leaders, and Defense Department field activity directors. Its subject line, “Do Not Compromise Military Operations for Personal Financial Gain,” frames the prohibition as a safeguard against exposing operational details for profit. Hegseth stated that transactions informed by nonpublic information, whether classified or unclassified, are strictly forbidden on all financial platforms.
Hegseth explained that enemy intelligence services monitor these markets for anomalies. When personnel engage in financial transactions regarding military outcomes, they generate a signal that can be aggregated and correlated to anticipate movements, targets, and timing. He noted that the lives of service members depend on the enemy not knowing what is coming, adding that the force must protect them rather than expose them for personal gain.
The warning follows a pattern of similar incidents involving military personnel. In April, a US Army soldier was arrested and charged with using confidential information to place $410,000 in bets on Polymarket concerning the timing of the military’s capture of Venezuelan President Nicolás Maduro. The arrest highlighted concerns regarding the intersection of insider knowledge and online gambling platforms.
Further scrutiny revealed broader activity in this area. An August report by the Anti-Corruption Data Collective identified 152 suspicious wallets that placed longshot bets on military and defense markets. Those accounts collectively won $8 million, raising questions about the source of their predictive capabilities.
The ban applies to a wide range of services, including traditional betting outlets as well as prediction markets like Polymarket and Kalshi. By prohibiting any financial transaction informed by nonpublic data, the department aims to eliminate a channel through which operational specifics might be inadvertently disclosed to foreign adversaries.
Source: Ars Technica · original report published
