Hegseth Memo Prohibits Prediction Market Wagers Tied to Military Knowledge

Defense Secretary Pete Hegseth has issued a directive instructing military personnel to refrain from placing bets on prediction markets or other financial platforms when they have access to nonpublic information. The guidance, contained in a memo distributed to senior Pentagon leadership, Combatant Command leaders, and Defense Department field activity directors, carries the subject line "Do Not Compromise Military Operations for Personal Financial Gain." The document, dated October 20, was released publicly on October 22.

Hegseth framed the restriction as a matter of operational security. He stated in the memo that financial transactions related to military outcomes generate signals that hostile foreign intelligence services could aggregate, correlate, and exploit to anticipate U.S. movements, targets, and timing. "The lives of our Service members often depend on the enemy not knowing what is coming," he wrote, adding that those who deploy deserve protection rather than exposure to the enemy for personal gain. He warned that enemies monitor movements in these markets and that any transaction on a military outcome creates a signal that can be used against U.S. forces.

The warning follows documented instances of personnel profiting from confidential information. In April, a U.S. Army soldier was arrested and charged with using nonpublic details to place $410,000 in bets on Polymarket concerning the timing of the military's capture of Venezuelan President Nicolás Maduro. An August report from the Anti-Corruption Data Collective identified 152 suspicious wallets that placed longshot wagers on military and defense markets, collectively winning $8 million.

The prohibition covers all financial platforms, including traditional betting services as well as prediction markets such as Polymarket and Kalshi. Defense Department personnel are barred from any financial transaction informed by nonpublic information, Hegseth wrote, whether that information is classified or unclassified. The memo also argues that betting can distort judgment among those making operational decisions.

The directive now stands as standing guidance for the department's personnel. Its issuance reflects ongoing concern within the Pentagon that insider knowledge tied to military planning could leak through financial activity, and that such activity could compromise operations or endanger the lives of service members. The department has not announced further actions beyond the memo's restrictions.