The Pentagon has prohibited its personnel from using undisclosed military information to wager on future operations, including through prediction-market platforms such as Kalshi and Polymarket.
US Defense Secretary Pete Hegseth announced the restriction in a memo sent Tuesday to senior Pentagon officials and defense agencies. The rule covers transactions based on both classified and unclassified nonpublic information, targeting bets linked to potential military action and other outcomes.
According to Cointelegraph, Hegseth said prediction-market activity could create two risks: revealing sensitive operational information to adversaries and compromising the judgment of personnel involved in planning or carrying out missions.
Why the Pentagon acted
Hegseth warned that hostile governments and other adversaries monitor activity in prediction markets. A wager tied to a strike, military operation or other event could provide signals about what the US might be preparing to do, even if the person placing the bet does not directly disclose the underlying information.
The secretary also argued that financial exposure could create a conflict for military staff. Someone involved in logistics who had money riding on a particular strike date could have an interest in that date, while an analyst holding a position on an outcome could be influenced by the result.
The directive therefore goes beyond classified material. It bars Pentagon and Department of War personnel from using any nonpublic information for financial transactions, whether the information is formally classified or not.
Cases involving military information
The policy follows criminal cases involving alleged bets connected to sensitive military events.
In April, US Army soldier Gannon Ken Van Dyke was indicted over allegations that he used classified information about an operation to capture Venezuelan leader Nicolás Maduro. Prosecutors claim he took part in planning and executing the operation before using advance knowledge to wager more than $400,000 on Polymarket outcomes related to Maduro’s removal. Van Dyke has pleaded not guilty to all charges.
Israeli authorities also arrested and indicted a military reservist and a civilian in February. They were accused of using classified information to place Polymarket bets related to Israeli military strikes on Iran.
Prediction markets allow participants to trade contracts linked to the likelihood of an event occurring. In this case, the Pentagon’s concern is that access to inside information could turn those markets into both a personal financial opportunity and a potential source of operational leaks.
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