Pentagon Memo Flags $8 Million in Suspicious Military Bets

A new defense order prohibits military and civilian staff from placing bets on prediction markets using inside information.

Defense Secretary Pete Hegseth issued the memo on October 20. The document, titled "Do Not Compromise Military Operations for Personal Financial Gain," was sent to senior Pentagon leaders, Combatant Command heads, and field activity directors. CBS News published the text on October 22. Hegseth argued that financial transactions tied to military outcomes create a signal that hostile intelligence services can exploit. He stated that foreign actors can aggregate and correlate these signals to anticipate American movements, targets, and timing. The memo notes that service members often depend on the enemy not knowing what is coming next.

The ban applies to all financial platforms. This includes traditional betting services and prediction markets such as Polymarket and Kalshi. Personnel are barred from making any financial transaction informed by nonpublic information, whether that information is classified or unclassified. Hegseth wrote that those who carry the flag into harm's way deserve a force that protects them, rather than one that exposes them for personal gain.

The directive follows a specific criminal case from earlier this year. In April, a US Army soldier was arrested and charged with using confidential information to make $410,000 in Polymarket bets. The soldier wagered on the timing of the military's capture of Venezuelan President Nicolás Maduro. The memo frames this type of betting as a threat to operational judgment, warning that personal financial stakes can compromise operations and put troops at risk.

Concerns about the practice extend beyond that single arrest. An August report from the Anti-Corruption Data Collective identified 152 suspicious wallets that placed longshot bets on military and defense markets. Those wallets won a combined $8 million. The data suggests a pattern of activity that aligns with Hegseth's warning about insiders leveraging nonpublic data for financial gain.

The memo does not specify new penalties for violations, but it directs commanders to enforce the rule. It serves as a formal warning to department leaders that personal wagers on defense outcomes are now a security concern. The order remains in effect for all covered personnel across the Department of Defense.