Pentagon Guidance: Military Bets on Operations
The Department of Defense has issued a directive barring personnel from placing financial wagers on military outcomes using nonpublic information.
By Thomas Reynolds ·
A U.S. Army service member reportedly profited $410,000 in Polymarket wagers related to the timing of the military's capture of Venezuelan President Nicolás Maduro. This figure highlights the lucrative potential of trading on insider knowledge, a practice the Pentagon is moving to curb.
In a memorandum dated October 20, Defense Secretary Pete Hegseth instructed senior leadership, Combatant Command leaders, and field activity directors regarding financial transactions tied to military operations. The guidance establishes a clear prohibition on using nonpublic information to place bets.
Hegseth stated, "Our enemies watch movements in these markets." He warned that when personnel engage in financial transactions concerning military outcomes, they inadvertently create a signal that foreign intelligence services can exploit to anticipate movements, targets, and timing.
The directive explicitly forbids personnel from engaging in any financial transaction informed by nonpublic information. This restriction applies regardless of whether the underlying information is classified or unclassified. The policy covers all financial platforms, including traditional betting services and prediction markets such as Polymarket and Kalshi.
The guidance follows an August report by the Anti-Corruption Data Collective. The report identified 152 suspicious wallets that placed longshot bets on military and defense markets, collectively winning $8 million. The report suggests a pattern of activity that warrants scrutiny regarding the source of such funds.
The memo is titled "Do Not Compromise Military Operations for Personal Financial Gain." It emphasizes that the lives of service members depend on the enemy not knowing what is coming. Hegseth asserted that those who carry the flag into harm's way deserve protection from exposure to the enemy for personal gain.
The scope of the prohibition is broad, encompassing both classified and unclassified information. By restricting financial transactions based on any nonpublic data, the Department aims to prevent the creation of signals that hostile foreign intelligence services could aggregate and correlate.
The enforcement of this policy raises operational questions regarding the monitoring of financial platforms and the identification of illicit gains. The Department of Defense has not detailed specific enforcement mechanisms for personnel who violate these guidelines regarding military operations.
Source: Ars Technica
