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Defense Secretary Pete Hegseth issued a memo warning military personnel against using nonpublic information to make bets on prediction markets, saying the wagers could give important clues to enemy countries. “Do Not Compromise Military Operations for Personal Financial Gain,” said the subject line of an October 20 memo published yesterday by CBS News. Hegseth’s memo was sent to senior Pentagon leadership, Combatant Command leaders, and Defense Department field activity directors. Hegseth wrote: Our enemies watch movements in these markets. When an American Service member, intelligence professional, or other Department civilian engages in a financial transaction on a military outcome, they create a signal. That signal can be aggregated, correlated, and exploited by hostile foreign intelligence services to anticipate our movements, targets, and timing. The lives of our Service members often depend on the enemy not knowing what is coming. The men and women who carry our flag into harm’s way deserve a Force that protects them—not one that exposes them to the enemy for personal gain. In April, a US Army soldier was arrested and charged with using confidential information to make $410,000 in Polymarket bets on the timing of the military’s capture of Venezuelan President Nicolás Maduro. An August report by the Anti-Corruption Data Collective said the group found 152 suspicious wallets that placed longshot bets on military and defense markets and won a combined $8 million. Betting can warp judgment, Hegseth says Hegseth’s memo said the prohibition applies to “all financial platforms,” including traditional betting services and prediction markets such as Polymarket and Kalshi. Defense Department personnel may not make any financial transaction informed by nonpublic information, regardless of whether that information is classified or unclassified, Hegseth wrote.
document fetched 2026-10-24 15:22 · canonical https://arstechnica.com/tech-policy/2026/10/pentagon-memo-on-prediction-markets-says-insider-bets-put-troops-lives-at-risk