Hegseth Directs Pentagon Staff to Halt Insider Bets on War Outcomes

Defense Secretary Pete Hegseth issued a directive on October 20 that restricts how military personnel handle financial bets. The order warns that personal wagers on military outcomes can compromise operational security and reveal plans to foreign adversaries.

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 published the document on October 22. It explicitly bans any financial transaction based on nonpublic information, whether that data is classified or unclassified.

Hegseth stated that when a service member or civilian executes a bet tied to a military event, they create a signal. He argued that hostile intelligence services can aggregate and correlate these signals to predict American movements and targets. The memo notes that the lives of service members often depend on the enemy not knowing what is coming next.

The prohibition applies to all financial platforms. This includes traditional betting services and prediction markets such as Polymarket and Kalshi. Hegseth wrote that troops who carry the flag into harm's way deserve a force that protects them rather than one that exposes them to the enemy for personal gain.

The directive follows a specific criminal case from April. A US Army soldier was arrested and charged with using confidential information to place bets on Polymarket. Those wagers, focused on the timing of the military's capture of Venezuelan President Nicolás Maduro, resulted in $410,000 in gains for the soldier.

Broader concerns about the practice are supported by data from the Anti-Corruption Data Collective. An August report from the group identified 152 suspicious wallets that placed longshot bets on military and defense markets. Those wallets combined for a total win of $8 million. Hegseth's memo frames these financial stakes as a threat to military judgment and operational readiness.