Defense Secretary Pete Hegseth has implemented a new policy barring all Department of Defense staff from using undisclosed information to bet on future U.S. military actions. The directive specifically targets prediction markets and betting platforms such as Polymarket and Kalshi, which allow users to wager on geopolitical and military outcomes.

In a memo first reported by CBS News, Hegseth emphasized the national security implications of such activity. He argued that foreign adversaries monitor these prediction markets to gain insights into U.S. military movements or strategic intentions. By prohibiting the use of sensitive, non-public information for financial gain, the Pentagon seeks to ensure that personnel do not inadvertently or intentionally signal classified operational plans to the public or hostile actors.

The order reflects a broader concern regarding the intersection of decentralized prediction markets and national security. While these platforms have grown in popularity for forecasting political and global events, the Pentagon’s stance suggests that the potential for insider trading on military maneuvers poses a direct threat to operational security. The memo makes it clear that the primary motivation for the ban is to prevent the exploitation of sensitive data that could be leveraged by enemies of the United States. No specific disciplinary actions for violations were detailed in the initial reports, but the memo serves as a formal prohibition for all Pentagon employees.