TLDR
- Defense Secretary Pete Hegseth has banned Pentagon staff from using nonpublic information to bet on military action.
- The ban covers prediction market platforms such as Kalshi and Polymarket, and applies to both classified and unclassified information.
- Hegseth warned that enemies watch these markets and that betting could put service members’ lives at risk.
- The memo follows the April indictment of a US Army soldier accused of making over $400,000 on Polymarket bets tied to the Maduro operation.
- Israeli authorities also indicted a reservist and a civilian in February over Polymarket bets linked to strikes on Iran.
US Defense Secretary Pete Hegseth has banned Pentagon staff from using nonpublic information to bet on upcoming military action. The rule covers prediction market platforms such as Kalshi and Polymarket.
The order came in a memo sent on Tuesday to senior Pentagon leaders and defense agencies. It applies to all Department of War personnel.
Under the directive, staff cannot make financial transactions based on information that is not public. This includes both classified and unclassified information.
Hegseth Cites Security Risks
Hegseth said the ban is meant to protect military operations. He wrote that foreign rivals pay attention to betting activity on these platforms.
“Make no mistake why this matters. Our enemies watch movements in these markets,” Hegseth wrote.
He added that “the lives of our Service members often depend on the enemy not knowing what is coming.”
The memo also raised concerns about personal judgment. Hegseth said having money on the line could affect how staff do their jobs.
“A logistician with money riding on a strike date has an interest in that date,” he wrote. “An analyst with a position on an outcome has an interest in that outcome.”
Recent Cases Linked to Military Bets
The new rule follows a criminal case involving a US Army soldier. In April, Gannon Ken Van Dyke was indicted over bets placed on Polymarket.
Prosecutors say Van Dyke used classified information about the operation to capture Venezuelan leader Nicolás Maduro. He allegedly made more than $400,000 from the wagers.
According to prosecutors, Van Dyke helped plan and carry out the operation. They allege he then used his advance knowledge to bet on outcomes tied to Maduro’s removal.
Van Dyke has pleaded not guilty to all charges.
Similar cases have appeared outside the United States. In February, Israeli authorities arrested and indicted a military reservist and a civilian.
The two were accused of using classified information to place bets on Polymarket. The wagers were linked to Israeli military strikes on Iran.
Prediction markets let users bet on the outcome of real-world events. Topics range from elections to world affairs and, in some cases, military action.
Hegseth’s memo, sent on Tuesday, now bars every Pentagon employee from placing such bets using inside information. The rule applies whether that information is classified or not.
