Defense Spending: Pentagon Bans Insider Bets
A new directive warns troops that wagering on military outcomes with private knowledge could reveal strategy to foreign rivals.
By Ken Adams ·
Financial markets have long been places where information flows, but the military is now worried about a specific leak. Defense Secretary Pete Hegseth has issued a warning to his troops regarding this new trend.
The memo, dated October 20, tells military staff not to use secret information for personal profit. It carries the subject line Do Not Compromise Military Operations for Personal Financial Gain. CBS News made the document public on October 22. The note went to top Pentagon officials, heads of combat commands, and leaders of various defense activities.
Hegseth believes that enemies are watching these markets closely. He explains that when a soldier or civilian makes a bet based on military results, it creates a signal. Hostile intelligence agencies can then gather and use this data. They can predict American movements, targets, and timing with greater accuracy.
The stakes are high for those in uniform. The memo notes that service members often depend on the enemy staying in the dark. Hegseth wrote that soldiers deserve a force that protects them. He argued that troops should not be exposed to the enemy because of personal financial gain.
The rule applies to all financial platforms. This includes traditional betting sites and prediction markets like Polymarket and Kalshi. Staff cannot make any financial move if they have nonpublic information. It does not matter if the information is classified or just unclassified.
This directive comes after a specific legal incident earlier this year. In April, an Army soldier was arrested. He was charged with using confidential details to place bets on Polymarket. He wagered on when the military would capture Venezuelan President Nicolás Maduro. The soldier made $410,000 from these trades.
The worry is not limited to that one arrest. An August report from the Anti-Corruption Data Collective found more issues. The group identified 152 suspicious digital wallets. These accounts placed longshot bets on military and defense topics. Together, they won a total of $8 million.
Hegseth also views betting as a risk to clear thinking. The memo suggests that having a financial stake in the outcome can cloud judgment. It can compromise operations and put troops in danger. The goal is to keep the military focused on the mission, not on profit.
Source: Ars Technica
