Pete Hegseth warns DoD staff that betting on war reveals US military plans to enemies

Defense Secretary Pete Hegseth issued a memo on October 20 instructing military personnel to stop placing bets on prediction markets using nonpublic information. The directive, which CBS News released on October 22, warns that such transactions create financial signals that hostile intelligence services can exploit to anticipate American military movements.

The memo, titled "Do Not Compromise Military Operations for Personal Financial Gain," was sent to senior Pentagon leaders, Combatant Command heads, and directors of Defense Department field activities. Hegseth stated that when a service member or civilian makes a financial transaction tied to a military outcome, they create a signal. He argued that foreign adversaries can aggregate and correlate these signals to determine targets and timing, a risk he described as a threat to the lives of those deployed in the field.

The prohibition applies to all financial platforms, including traditional betting services and specific prediction markets like Polymarket and Kalshi. Hegseth specified that personnel may not make any financial transaction informed by nonpublic information, regardless of whether that information is classified or unclassified. He 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 new rules follow a criminal case that emerged earlier this year. In April, a US Army soldier was arrested and charged with using confidential information to place bets on Polymarket. The soldier wagered on the timing of the military's capture of Venezuelan President Nicolás Maduro and made $410,000 in profit from the trades.

Concerns about the practice extended beyond that single case. An August report from the Anti-Corruption Data Collective identified 152 suspicious wallets that placed longshot bets on military and defense markets. Those wallets won a combined $8 million. The report suggested that these patterns indicate a broader trend of insiders trading on nonpublic data.

Hegseth's memo frames betting as a threat to operational judgment. The Defense Secretary told commanders that personal financial stakes in military outcomes can compromise operations. The directive aims to prevent the department from being exposed to the enemy through the financial activities of its own staff.