Hegseth bars US forces from using undisclosed information to bet on Polymarket, Kalshi

Defense Secretary Pete Hegseth barred all Pentagon staff from using undisclosed information to place wagers on forthcoming U.S. military action using betting platforms and prediction markets like Kalshi and Polymarket.

“Make no mistake why this matters. Our enemies watch movements in these markets,” Hegseth said in a memo , first obtained by CBS News . “When an American Service member, intelligence professional, or other Department civilian engages in a financial transaction on a military outcome, they create a signal.”

One Pentagon official confirmed the authenticity of the memo to The Hill on Thursday.

The Pentagon did not immediately respond to The Hill’s request for comment.

Prediction market platforms exploded in popularity this year, raising concerns in Washington over the potential for insider trading by government officials. National security experts have warned bad actors can leverage the markets to identify upcoming operations.

Hegseth warned those signals can be aggregated and exploited by “hostile” foreign intelligence services to anticipate U.S. military movements, timing and targeting.

“The lives of our Service members often depend on the enemy not knowing what is coming,” the Defense secretary said in the memo dated Tuesday. “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 said violations could result in administrative, disciplinary and “where appropriate, criminal action” under the Uniform Code of Military Justice “and/or applicable federal law.”

The memo comes nearly six months after a U.S. soldier was arrested for allegedly using classified information to place a prediction market bet on the capture of Venezuelan President Nicolás Maduro.

Prosecutors said Army soldier Gannon Ken Van Dyke was involved in the planning of the Maduro operation in January and placed about $33,000 worth of bets prior to the incident.

Van Dyke entered a not guilty plea in late April.

The arrest of Van Dyke was the first high-profile case around alleged insider trading on events contracts, prompting a flurry of bills on Capitol Hill to bar elected officials or federal employees from participating in prediction markets.

A White House teleprompter operator was later placed on leave in July over allegedly making online bets on President Trump’s speeches. The operator, Gabriel Perez, was ordered to pay more than $172,000.