Pentagon Memo Bans Staff From Betting on Secret Military Outcomes

Defense Secretary Pete Hegseth ordered military personnel to stop using inside information for financial bets, warning that such activity reveals operational details to foreign adversaries. The directive, dated October 20, carries the subject line "Do Not Compromise Military Operations for Personal Financial Gain." CBS News published the document on October 22.

The memo was distributed to senior Pentagon leaders, Combatant Command heads, and directors of Defense Department field activities. Hegseth stated that hostile intelligence services monitor prediction markets to aggregate and correlate data. He wrote that when a service member or civilian makes a financial transaction tied to a military outcome, they create a signal that enemies can exploit to anticipate American movements, targets, and timing.

"The lives of our Service members often depend on the enemy not knowing what is coming," the memo read. Hegseth added that troops who "carry our flag into harm's way deserve a Force that protects them" rather than one that exposes them for personal gain. The prohibition applies to all financial platforms, including traditional betting services and prediction markets like Polymarket and Kalshi.

The ban covers any financial transaction informed by nonpublic information, regardless of whether that information is classified or unclassified. This rule follows a criminal case involving a US Army soldier arrested in April. The soldier was charged with using confidential information to place $410,000 in bets on Polymarket regarding the timing of the military's capture of Venezuelan President Nicolás Maduro.

Concerns about the practice extend beyond that single incident. An August report from the Anti-Corruption Data Collective identified 152 suspicious wallets that placed longshot bets on military and defense markets. Together, those wallets won a combined $8 million. The report noted that the group identified these accounts through their consistent pattern of wagering on obscure defense-related outcomes.

Hegseth's memo frames betting as a threat to operational judgment. The Defense Secretary argued that personal financial stakes in military outcomes can compromise operations and put troops at risk. The directive requires commanders to ensure their staff understand that financial gain must not come at the cost of mission security.