Defense Secretary Pete Hegseth is warning soldiers that they are prohibited from using “nonpublic information” to place bets on online prediction markets, warning that any violation of the rule may result in administrative punishment or even criminal prosecution.
Hegseth’s memo, sent to senior Defense Department personnel on Oct. 2, is an apparent attempt to crack down on a growing problem that has already resulted in charges against at least one member of the U.S. military: 38-year-old Master Sgt. Gannon Ken Van Dyke, who was arrested earlier this year on accusations that he bet close to $33,000 on the Jan. 3 operation to capture ex-Venezuelan leader Nicolás Maduro — an operation that he participated in.
Gannon reportedly made more than $400,000 in profit from the wager.
The memorandum bans betting on classified or unclassified information on “traditional betting platforms” or prediction markets like Kalshi and Polymarket. The document wasfirst reported by CBS.
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Hegseth warned in the memorandum that trades made with insider knowledge could create a “signal” that helps foreign actors anticipate military plans or movements.
“Our enemies watch movements in these markets,” Hegseth wrote. “That signal can be aggregated, correlated, and exploited by hostile foreign intelligence services to anticipate our movements, targets, and timing.”
The memorandum also warns members that having financial stakes in the outcomes of their work could warp their judgment and distract them from the department’s “sacred mission.”
“That is precisely the kind of dilution of the warrior ethos this Department has strived to eradicate under this administration,” Hegseth wrote. “We are restoring lethality, discipline, and singular focus on fighting and winning our Nation’s wars.”
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