Pentagon chief tells troops to stop gambling on war outcomes

The Department of Defense has issued a stern warning to its workforce, instructing members to stop using private knowledge to place wagers on future military events.

Defense Secretary Pete Hegseth sent a memo on October 20 to top Pentagon officials, Combatant Command leaders, and field activity directors. The document, titled “Do Not Compromise Military Operations for Personal Financial Gain,” outlines a strict prohibition against betting on military outcomes using nonpublic information. This guidance was made public yesterday by CBS News. The rule covers all financial platforms, including traditional betting services and emerging prediction markets like Polymarket and Kalshi.

The directive applies to a wide range of personnel, including active-duty service members, intelligence professionals, and civilian employees. Hegseth specified that the ban is triggered by any financial transaction based on information that is not public, whether that data is classified or merely unclassified. The goal is to prevent the creation of financial signals that could be tracked by outside observers.

Hegseth argued that hostile foreign intelligence services actively monitor these markets for clues. He wrote that when a military professional makes a bet on a specific outcome, they create a signal. Adversaries can aggregate, correlate, and exploit these signals to predict American movements, targets, and timing. The Secretary emphasized that the lives of service members often hinge on the enemy remaining unaware of upcoming actions.

The memo draws a direct line between personal financial gain and operational risk. Hegseth stated that the men and women who serve deserve a force that protects them, rather than one that exposes them to danger for the sake of individual profit. He noted that the current trend of betting on geopolitical and military events requires a formal response to maintain the element of surprise.

The warning follows a series of high-profile incidents that highlighted the vulnerability of military operations to market speculation. In April, a U.S. 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 reportedly made $410,000 in profits from those trades.

Further scrutiny came in August when the Anti-Corruption Data Collective released a report on suspicious activity in defense markets. The group identified 152 wallets that placed longshot bets on military and defense-related events. These accounts combined for a total win of $8 million, suggesting a pattern of informed wagering that aligned with military developments.

The stakes of this new policy are high for the Great Lakes and Ohio Valley regions, which host significant military infrastructure and training facilities. With the directive now in effect, personnel in these areas must review their financial activities to ensure compliance. The move signals a broader shift in how the Pentagon views the intersection of digital finance and national security, aiming to close the gap between private market behavior and public defense strategy.