War Secretary Pete Hegseth has notified all Department of War personnel that they are prohibited from being involved in financial transactions—including through online prediction markets such as Polymarket and Kalshi—using nonpublic information.
CBS News was first to report on the Pentagon memo, which was dated Oct. 20.
Hegseth’s memo concerns uniformed military personnel, as well as civilian Department of War employees.
The ban covers classified materials as well as unclassified nonpublic information.
Those alleged to be in violation may face administrative, disciplinary, and even criminal liability in military or civilian federal courts, as applicable.
The memo comes as online platforms have allowed users to wager money on predictions in a growing number of categories, including matters of geopolitics and international relations.
This has fueled concerns about people with access to privileged and potentially highly sensitive insider information enriching themselves off that access.
Insider trading with information about forthcoming sensitive military operations could also risk exposing those actions.
“When an American service member, intelligence professional, or other department civilian engages in a financial transaction on a military outcome, they create a signal,” Hegseth’s memo reads.
“That signal can be aggregated, correlated, and exploited by hostile foreign intelligence services to anticipate our movements, targets, and timing. The lives of our service members often depend on the enemy not knowing what is coming.”
Earlier in 2026, the Department of Justice secured a criminal indictment against U.S. Army special operations soldier Gannon Ken Van Dyke, accusing him of using classified information to place numerous wagers on Polymarket.
Prosecutors alleged that Van Dyke was involved in planning the Jan. 3 raid to capture Venezuelan leader Nicolás Maduro and used his inside knowledge to make numerous wagers concerning the timing of Maduro’s capture, in turn netting himself about $400,000.
Van Dyke has pleaded not guilty. His case is continuing.
Seven U.S. military personnel were injured during the Maduro raid. The indictment against Van Dyke asserts no connection between his alleged wagering on Polymarket and the injuries sustained by U.S. troops involved in the mission.
Beyond jeopardizing a military operation, Hegseth warned in his memo that trading on insider information can compromise good judgment.
“A logistician with money riding on a strike date has an interest in that date. An analyst with a position on an outcome has an interest in that outcome,” the memo reads.
“That is precisely the kind of dilution of the warrior ethos this department has strived to eradicate under this administration.”
After a U.S. fighter jet was shot down over Iran in April, leaving two U.S. airmen stranded behind enemy lines, Polymarket began showing wagers concerning when the U.S. military would retrieve the airmen.
Polymarket canceled those prediction fields amid backlash from lawmakers.
Authorities in Israel have also arrested at least two Israeli military officers with alleged wagering on Polymarket concerning the timing of military operations against Iran and Yemen.
Policymakers have previously shown concern about trading activity on sites such as Polymarket and Kalshi.
Even before Van Dyke’s arrest, a group of Democratic lawmakers proposed the “Banning Event Trading on Sensitive Operations and Federal Functions Act” or “BETS OFF Act” to prevent prediction markets from facilitating wagers on the actions of government or matters of war, assassinations, and terrorism.
In June, the Commodity Futures Trading Commission proposed a similar rule to block prediction markets involving matters of war, assassinations, and terrorism.
