Hegseth Orders Defense Staff to Halt Wagers on Classified Outcomes

Defense Secretary Pete Hegseth issued a directive on October 20 prohibiting military and civilian department personnel from using nonpublic information to place bets on financial platforms. The memo, titled "Do Not Compromise Military Operations for Personal Financial Gain," was distributed to senior Pentagon leaders, Combatant Command heads, and field activity directors. CBS News released the document on October 22.

The order targets all financial platforms, including prediction markets such as Polymarket and Kalshi, as well as traditional betting services. Hegseth stated that any financial transaction informed by nonpublic data, whether classified or unclassified, is now barred for department personnel. The goal is to prevent insiders from creating signals that hostile foreign intelligence services can aggregate and exploit.

Hegseth argued that when a service member or intelligence professional trades on a military outcome, they reveal information about American movements, targets, and timing. He wrote that enemies track these activities and use them to anticipate U.S. actions. The memo noted that the lives of service members depend on adversaries not knowing what is coming next.

The directive follows a specific criminal case that exposed vulnerabilities in the system. In April, a U.S. Army soldier was arrested and charged with using confidential information to place $410,000 in bets on Polymarket. Those wagers targeted the timing of the military’s capture of Venezuelan President Nicolás Maduro.

Broader market analysis suggests the issue extends beyond individual cases. An August report from the Anti-Corruption Data Collective identified 152 suspicious wallets that placed longshot bets on military and defense markets. Those accounts collectively won $8 million. The report found that these wallets consistently predicted outcomes that aligned with nonpublic defense information.

Hegseth framed the ban as a measure to protect operational judgment. He told commanders that personal financial stakes in military outcomes can compromise operations and put troops at risk. The memo emphasized 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 apply immediately to all Defense Department employees and contractors with access to sensitive information. Personnel must now review their trading activity to ensure no wagers are based on data not yet public. The directive aims to close the gap between private financial interests and public military strategy.