Defense Secretary bars DoD staff from betting on military actions using insider data

Pete Hegseth, the U.S. Defense Secretary, sent a memorandum on Oct. 20 ordering all Defense Department employees to refrain from using both classified and unclassified information to gamble on outcomes of U.S. military actions. The ban explicitly names prediction markets Polymarket and Kalshi, noting that financial trades could create signals observable by adversary intelligence agencies. Hegseth emphasized that such signals might allow foreign services to infer American troop movements, targets, and timing.

The memo states that breaches could result in administrative discipline or criminal prosecution under federal statutes and the Uniform Code of Military Justice. This policy arrives after a Special Forces soldier was accused of wagering over $33,000 on Polymarket following President Trump's announcement of the Maduro capture, later winning more than $409,000. Federal investigators are pursuing the case in New York federal court.