Pentagon Memo Bans Military Bets on Prediction Markets to Protect Troop Safety

The Department of Defense has issued a new directive instructing military personnel to avoid making financial wagers on prediction markets that involve nonpublic information. The move aims to prevent service members from inadvertently signaling their intentions to hostile foreign powers through their betting activity.

Defense Secretary Pete Hegseth outlined the concerns in a memo released on October 21. The document was distributed to senior Pentagon leadership, Combatant Command leaders, and directors of Defense Department field activities. The primary goal of the guidance is to ensure that personal financial interests do not interfere with the operational security of military missions.

Hegseth argued that enemy nations closely monitor fluctuations in these financial markets. He stated that when a service member, intelligence professional, or civilian places a bet on a military outcome, they create a distinct signal. Hostile intelligence services can then aggregate and correlate these signals to predict U.S. movements, targets, and timing.

The memo emphasized that the lives of service members often depend on the element of surprise. Hegseth wrote that troops deserve a force that protects them from exposure, rather than one that risks their safety for personal gain. He noted that the prohibition applies to all financial platforms, including traditional betting services and modern prediction markets like Polymarket and Kalshi.

The directive clarifies that the rule covers any financial transaction informed by nonpublic information. This includes both classified and unclassified data. The goal is to close the gap between what military personnel know and what they might inadvertently reveal through their financial behavior.

This guidance comes in response to recent incidents that highlighted the potential risks of military personnel engaging in such markets. In April, a U.S. Army soldier was arrested and charged with using confidential information to make bets on Polymarket. The soldier wagered on the timing of the military’s capture of Venezuelan President Nicolás Maduro and reportedly made $410,000 in profits.

The issue gained further attention following an August report by the Anti-Corruption Data Collective. The group identified 152 suspicious wallets that placed longshot bets on military and defense markets. These accounts collectively won $8 million, suggesting a pattern of informed wagering that could compromise operational secrecy.

Hegseth’s memo serves as a formal warning to all Department of Defense personnel. It reinforces the idea that financial activity must remain separate from operational duties. By restricting these bets, the Pentagon hopes to reduce the noise in prediction markets that adversaries might use to track U.S. strategy.

The new rules take effect immediately for the groups listed in the distribution list. Leaders are expected to communicate the guidelines to their respective units. The memo underscores a broader shift in how the military views digital and financial footprints in the modern battlefield.