Pentagon Bans Personnel from Trading on Prediction Markets
The Pentagon has taken significant steps to bolster operational security by issuing a memorandum that prohibits Department of War personnel from making financial transactions based on nonpublic information. This includes wagering on military outcomes through platforms like Polymarket and Kalshi. The directive, announced by Secretary of War Pete Hegseth, applies to both classified and unclassified information, regardless of whether transactions are conducted directly or through third parties. Personnel found in violation of this policy could face administrative, disciplinary, or criminal consequences under military justice and federal law.
The department has expressed concerns that such financial activities pose a national security risk. Trading on prediction markets could inadvertently disclose sensitive information regarding upcoming military operations. Foreign intelligence agencies might analyze market signals to deduce the timing of operations, potential targets, and troop movements, which could jeopardize the safety of service members.
Additionally, the memorandum highlights the potential for financial interests tied to military outcomes to compromise personnel's professional judgment. This could conflict with the military's priorities of maintaining discipline, operational readiness, and successfully executing military engagements.
Case Closed
This directive comes in the wake of increased scrutiny surrounding prediction market trading that involves sensitive government information. A notable case involves Gannon Ken Van Dyke, a US Army soldier accused of profiting from classified intelligence. Prosecutors charged Van Dyke in April 2026, alleging that he exploited information gained during the planning and execution of Operation Absolute Resolve, which aimed to capture Venezuelan President Nicolás Maduro.
According to the charges, Van Dyke placed approximately 13 bets totaling $33,034 on Polymarket, focusing on potential US military actions in Venezuela and the removal of Maduro from power. These wagers reportedly generated a profit of around $409,881 following Maduro's capture in January. The Pentagon's new restrictions are part of a broader effort to prevent similar incidents and safeguard national security.
