Pentagon Bars Prediction-Market Bets Using Nonpublic Military Information

Kalshi, Polymarket Among Covered Venues

Violations May Lead to Discipline or Criminal Charges

The Pentagon has issued guidance barring trades on prediction markets using nonpublic information related to military operations. The move reflects concerns that insider betting could expose operational plans and distort the judgment of military personnel.

The Associated Press and other outlets reported on October 22 that Defense Secretary Pete Hegseth, in a memo sent on October 20 to senior Pentagon officials and subordinate agencies, said Defense Department personnel, including service members and civilian employees, must not use nonpublic information in financial transactions. The restriction also applies to prediction markets such as Kalshi and Polymarket.

Trading on information that has not been made public is prohibited even if it is not formally classified. Violators could face disciplinary action as well as criminal penalties under military law or federal law.

Hegseth wrote that trading activity on prediction markets could itself offer clues to adversaries. “Our adversaries are watching the movements in these markets,” he wrote. “The lives of our service members often depend on the enemy not knowing what is about to happen.”

He also said personal financial interests could affect military judgment. A logistics officer who wagers on the date of an attack, or an analyst who invests in the outcome of an operation, would develop a private stake in that date or result.

The guidance comes after a series of allegations involving prediction-market trades tied to military information. In April, U.S. Army member Gannon Ken VanDyke was indicted on charges that he used classified details tied to an operation to capture Venezuelan leader Nicolas Maduro and made more than $400,000 in profit on Polymarket.

Prosecutors allege he bet on contracts related to Maduro losing power based on information he obtained while participating in the planning and execution of the operation. VanDyke has denied all charges.

A similar case emerged in Israel. In February, authorities arrested and charged one reservist and one civilian on allegations they traded on Polymarket using information about an Israeli military strike on Iran.