Hegseth: Troop Bets Let Foreign Spies Read US Military Moves

Defense Secretary Pete Hegseth issued a directive on October 20 that prohibits military personnel from placing bets on prediction markets using nonpublic information. The order, titled "Do Not Compromise Military Operations for Personal Financial Gain," warns that financial activity tied to military outcomes creates signals that hostile foreign intelligence services can exploit.

Hegseth argued that when a service member, intelligence professional, or civilian places a bet based on inside knowledge, they reveal data about American targets and timing. The memo states that adversaries can aggregate and correlate these transactions to anticipate US movements. Hegseth wrote that those who carry the flag into harm's way deserve a force that protects them rather than one that exposes them for personal gain.

The directive covers all financial platforms, including traditional betting services and prediction markets like Polymarket and Kalshi. Department personnel are barred from making any financial transaction informed by nonpublic information, whether that data is classified or unclassified. The memo was sent to senior Pentagon leaders, Combatant Command heads, and directors of Defense Department field activities.

This policy follows a specific incident involving a US Army soldier. In April, the soldier was arrested and charged with using confidential information to make bets on Polymarket regarding the timing of the military's capture of Venezuelan President Nicolás Maduro. The soldier won $410,000 in those wagers.

Concerns about insider trading in military markets extend beyond that single case. An August report from the Anti-Corruption Data Collective identified 152 suspicious wallets that placed longshot bets on defense and military markets. Those accounts combined to win $8 million. Hegseth's memo frames this activity as a threat to operational judgment, asserting that personal financial stakes in military outcomes can compromise operations and put troops at risk.

The memo emphasizes that the prohibition applies to all financial transactions informed by nonpublic data. It does not ban betting in general, but it forbids the use of information not available to the public. The directive aims to close the gap between internal knowledge and public market activity, ensuring that adversaries cannot read American intent through betting patterns.