Hegseth: $8M in Insider Bets Exposed US Military Moves to Enemies

Defense Secretary Pete Hegseth issued a memo on October 20 ordering military personnel to stop using nonpublic information to place bets on prediction markets. The directive warns that such financial transactions create signals that hostile intelligence services can exploit to anticipate American military movements.

The memo, titled "Do Not Compromise Military Operations for Personal Financial Gain," was sent to senior Pentagon leaders, Combatant Command heads, and directors of Defense Department field activities. CBS News published the document on October 22.

Hegseth argued that when a service member or civilian places a wager tied to a military outcome, they generate a detectable pattern. He wrote that foreign intelligence agencies can aggregate and correlate these signals to predict US targets and timing.

The prohibition applies to all financial platforms, including traditional betting services and prediction marketplaces like Polymarket and Kalshi. The memo specifies that the ban covers both classified and unclassified nonpublic information.

The directive follows a criminal case from April in which a US Army soldier was arrested and charged with making $410,000 in Polymarket bets based on confidential details regarding the timing of the capture of Venezuelan President Nicolás Maduro.

A separate August report from the Anti-Corruption Data Collective identified 152 suspicious wallets that placed longshot bets on military and defense markets. Those wallets won a combined total of $8 million.

Hegseth stated that the lives of service members depend on the enemy not knowing what is coming. He added that those who carry the flag into harm's way deserve a force that protects them rather than one that exposes them to the enemy for personal financial gain.