Pentagon bans troops from betting on prediction markets using nonpublic info

Defense Secretary Pete Hegseth has issued a directive prohibiting U.S. troops from using nonpublic information to place bets on prediction markets, according to reports from citizensvoice.com and mainlinemedianews.com.

The directive highlights concerns that such financial transactions create signals that enemies could exploit, as noted in a memo reviewed by The Associated Press. The memo states that both classified and unclassified but nonpublic information cannot be used for trading on platforms such as Polymarket and Kalshi.

The policy follows an incident where a U.S. Special Forces soldier involved in an operation to capture Venezuelan President Nicolás Maduro was charged with using classified information to place bets totaling more than $32,500 on Polymarket. The memo warns that violators may face administrative and criminal penalties under military or federal law.

Hegseth emphasized that financial stakes can affect judgment, noting that individuals with money on specific military outcomes might have conflicts of interest. When asked, a defense official declined to provide further details beyond the memo.

The directive also touches on concerns about government officials and employees using privileged access for betting on prediction markets, an issue noted but not detailed beyond the Pentagon.