Hegseth bans troops from betting military operation with Polymarket

Oct. 23 (UPI) -- Defense Secretary Pete Hegseth has banned all Pentagon personnel from using nonpublic information to bet on U.S. military operations under threat of administrative, disciplinary and possibly criminal action.

The ban applies to the use of both classified or unclassified nonpublic information and all financial platforms, including Polymarket and Kalshi, both prediction market platforms, according to a memo dated Tuesday and obtained by CBS News.

"Make no mistake why this matters. Our enemies watch movements in these markets. When an American service member, intelligence professional or other department civilian engages in a financial transaction on a military outcome, they create a signal. That signal can be aggregated, correlated and exploited by hostile foreign intelligence services to anticipate our movements, targets and timing," Hegseth said in the three-paragraph memo.

"The lives of our service members often depend on the enemy not knowing what is coming. The men and women who carry our flag into harm's way deserve a force that protects them -- not one that exposes them to the enemy for personal gain."

Hegseth added that financial stakes in military operations could warp judgement, stating a logistician who bets on the date of a strike would have an interest in that date.

"That is precisely the kind of dilution of the warrior ethos this department has strived to eradicate under this administration," he said.

"We are restoring lethality, discipline and singular focus on fighting and winning our nation's wars, and nothing should distract us from that sacred mission. Not entertainment. Not a payout. Every member of this department will conduct themselves accordingly."

Prediction markets, such as Polymarket and Kalshi, have surged in popularity in recent years, allowing users to make wagers on seemingly anything, from who will win the Super Bowl to when the war between Russia and Ukraine will end.

In April, the Justice Department charged Gannon Ken Van Dyke, a U.S. Army Special Forces soldier who participated in the capture of Venezuelan leader Nicolas Maduro in January, with using classified information about the operation to make bets on Polymarket.

The indictment alleges that Van Dyke was involved in the planning and execution of the operation from about Dec. 8 and placed 13 bets valued at a combined $33,034 concerning U.S. military involvement in Venezuela in late December. Federal prosecutors allege that Van Dyke profitted $409,881 from his bets concerning the Jan. 3 military operation.