Pentagon chief bars insider bets on war outcomes

Defense Secretary Pete Hegseth has barred military personnel from trading on nonpublic knowledge about upcoming operations in financial markets, a move designed to close a channel he says foreign intelligence services could exploit to predict American actions. The directive, issued in a memo dated October 20 and published this week, tells service members that placing bets on military outcomes creates a trail that hostile actors can trace.

The prohibition is framed as a matter of troop safety. In the memo, Hegseth wrote that American movements, targets, and timing can be anticipated once a transaction tied to a military outcome is placed. "The lives of our Service members often depend on the enemy not knowing what is coming," he wrote, adding that those sent into harm's way deserve a force that shields them from the enemy rather than one that exposes them for personal gain.

The subject line of the document read: "Do Not Compromise Military Operations for Personal Financial Gain." It went to senior Pentagon leadership, Combatant Command leaders, and Defense Department field activity directors.

The warning follows a string of cases involving the intersection of classified planning and speculation markets. In April, a US Army soldier was arrested and charged with using confidential information to place Polymarket bets worth $410,000 on when the military would capture Venezuelan President Nicolás Maduro. An August analysis by the Anti-Corruption Data Collective identified 152 suspicious wallets that took positions on military and defense markets, taking a combined $8 million on longshot wagers.

Hegseth said the ban reaches all financial platforms, including traditional betting services and prediction markets such as Polymarket and Kalshi. Department of Defense personnel are prohibited from making any financial transaction informed by nonpublic information, regardless of whether that information is classified or unclassified.

What comes next is enforcement across the Defense Department, where personnel at every level now face restrictions on trading tied to operational knowledge. The memo sets a clear line: no financial transaction informed by nonpublic information, on any platform. Hegseth's concern, stated plainly, is that bets placed on military outcomes can warp judgment and endanger the lives of those who carry the flag into harm's way.