Hegseth Bars Troops and Pentagon Staff From Betting on Prediction Markets With Nonpublic Information

Defense Secretary Pete Hegseth has ordered U.S. troops and Pentagon civilians not to use nonpublic government information to place bets on prediction markets, warning that violators could face criminal charges.

The one-page memo, dated Tuesday, Oct. 20, bars Defense Department personnel from placing financial wagers, "including traditional betting platforms and prediction markets such as 'Polymarket' or 'Kalshi,'" using information that has not been made public, according to DefenseScoop, which obtained the directive on Thursday. The Associated Press also reviewed the memo.

What the Memo on Prediction Markets Says

"This prohibition applies whether the transaction is informed by classified or unclassified information," Hegseth wrote, according to DefenseScoop. "Violations may result in administrative, disciplinary, and, where appropriate, criminal action under the Uniform Code of Military Justice and/or applicable federal law."

The memo was addressed to Pentagon leadership, combatant commanders and the directors of Defense agencies and field activities, DefenseScoop reported.

Hegseth framed the rule as an operational security issue. "When an American Service member, intelligence professional, or other Department civilian engages in a financial transaction on a military outcome, they create a signal," he wrote, according to the AP.

He also argued that money on the line can distort decisions. "Beyond operational security, financial stakes can warp judgment," the memo says. "A logistician with money riding on a strike date has an interest in that date. An analyst with a position on an outcome has an interest in that outcome."

Hegseth called that "precisely the kind of dilution of the warrior ethos this Department has strived to eradicate under this administration," DefenseScoop reported.

Asked about the new policy, a defense official said the Pentagon had no other information to offer beyond the memo, according to the AP.

The Maduro Raid Case

The directive comes months after federal prosecutors charged a Special Forces soldier with using classified information about the mission to capture then-Venezuelan President Nicolás Maduro to win more than $400,000 on Polymarket.

In April, Master Sgt. Gannon Ken Van Dyke, 38, was charged by federal prosecutors and federal regulators with using his access to place bets totaling more than $32,500 on when Maduro might be removed from power, the AP reported. According to the federal complaint, most of the bets were placed on the night of Jan. 2, hours before the first missiles fell on Caracas.

Van Dyke has pleaded not guilty and was released on bond, DefenseScoop reported. The charges are allegations, and he is presumed innocent unless proven guilty.

In August, Reuters reported that Polymarket had referred "dozens" of potential military insider trading cases to the Justice Department, according to DefenseScoop.

The concern is not limited to the Pentagon. The AP reported that a group of new Polymarket accounts made well-timed bets on whether the U.S. and Iran would reach a ceasefire shortly before President Donald Trump announced one in April, and that the White House warned staff the same day against using private information to trade on prediction markets. Kalshi also fined and suspended three congressional candidates who the company said wagered on their own elections, according to the AP.

Image: David B. Gleason / Wikimedia Commons, CC BY-SA 2.0.

Hold Everyone Accountable.

Sources: DefenseScoop, "Hegseth warns troops against using military information for gambling, prediction market bets" (Oct. 22, 2026): https://defensescoop.com/2026/10/22/hegseth-memo-gambling-prediction-markets/ ; The Associated Press via KNSS, "New Pentagon directive bans troops from using nonpublic info to bet in prediction markets" (Oct. 22, 2026): https://www.audacy.com/knss/news/politics/hegseth-prediction-markets-pentagon-3fc284334ba2c192c6c729ec592443f5