Defense Secretary Pete Hegseth issued a memorandum banning Department of Defense (DoD) personnel from using nonpublic information to place wagers on U.S. military operations. The directive, dated October 20, 2026, applies to both classified and unclassified information and specifically names prediction markets such as Polymarket and Kalshi as prohibited platforms for such transactions.
The memorandum was addressed to senior Pentagon leadership and combatant commanders following reports of service members and government officials using internal knowledge to profit from betting. Hegseth stated in the document that financial transactions regarding military outcomes create a "signal" that foreign adversaries can monitor to anticipate American military movements, targets, and timing. Beyond operational security, the secretary noted that having a financial stake in an outcome could warp the judgment of logisticians or analysts.
The directive follows the April arrest of U.S. Army Master Sgt. Gannon Ken Van Dyke, a 38-year-old Special Forces soldier. Federal investigators alleged Van Dyke used classified information regarding the mission to capture Venezuelan leader Nicolas Maduro to place over $32,500 in bets on Polymarket. Those wagers, placed just hours before military action began in January, resulted in winnings exceeding $409,000. Van Dyke has entered a not guilty plea to federal charges.
The scale of this issue extended beyond the Pentagon to other branches of government earlier this year. In April, the White House issued similar warnings to staff after new accounts on Polymarket made specific bets on a U.S.-Iran ceasefire just before it was publicly announced by President Trump. Additionally, Kalshi recently fined and suspended three congressional candidates for wagering on their own elections. This directive treats betting signals as signals that foreign intelligence services could analyze to anticipate American military movements.
Moving forward, the policy is effective as of the October 20, 2026, memorandum. Military commanders are now responsible for enforcing these rules within their units and ensuring that personnel understand that even unclassified "nonpublic" information is off-limits for wagering. While the Pentagon declined to provide details beyond the memo, the legal proceedings for Master Sgt. Van Dyke continue in New York federal court. Personnel who fail to comply face administrative disciplinary action or referral for criminal charges.