Hegseth Warns Troops That Prediction Market Bets Could Tip Off Enemies

Defense Secretary Pete Hegseth has issued a memo cautioning military personnel against using nonpublic information to place bets on prediction markets, saying such wagers could hand important clues to adversaries.

The memo, dated October 20, carries the subject line "Do Not Compromise Military Operations for Personal Financial Gain." CBS News published it on October 22. It was sent to senior Pentagon leaders, Combatant Command heads and the directors of Defense Department field activities.

Hegseth argued that enemies track activity in these markets. In his words, when a service member, intelligence professional or other department civilian carries out a financial transaction tied to a military outcome, "they create a signal." He wrote that hostile foreign intelligence services can aggregate, correlate and exploit that signal 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 said. Hegseth added that those who "carry our flag into harm's way deserve a Force that protects them" rather than one that exposes them to the enemy for personal gain.

The prohibition covers "all financial platforms," the memo states, including traditional betting services and prediction markets such as Polymarket and Kalshi. Department personnel may not make any financial transaction informed by nonpublic information, Hegseth wrote, whether that information is classified or unclassified.

The directive follows a criminal case from earlier this year. In April, a US Army soldier was arrested and charged with using confidential information to make $410,000 in Polymarket bets on the timing of the military's capture of Venezuelan President Nicolás Maduro.

Concerns about the practice extend beyond that single case. An August report from the Anti-Corruption Data Collective said the group identified 152 suspicious wallets that placed longshot bets on military and defense markets. Together, those wallets won a combined $8 million.

Hegseth's memo also frames betting as a threat to judgment, according to the report on its contents. The Defense Secretary's message to commanders and department leaders is that personal financial stakes in military outcomes can compromise operations and put troops at risk.