Defense Secretary Pete Hegseth has banned Pentagon personnel from using nonpublic information to bet on U.S. military operations, issuing a memo that specifically names the prediction markets Polymarket and Kalshi, CBS News reported after obtaining the document.

Hegseth signed the memo on Oct. 20, addressing it to senior Pentagon leadership and combatant commanders. It prohibits trading on both classified and unclassified nonpublic information related to military operations, and it applies to service members, intelligence professionals and Defense Department civilians alike.

OUR ENEMIES WATCH MOVEMENTS IN THESE MARKETS

That warning, drawn directly from the memo, reflects Hegseth's stated rationale: a prediction-market wager placed by someone with inside knowledge of troop movements, strikes or operation timing "creates a signal" that foreign intelligence services could analyze to anticipate where, when and how U.S. forces will act. Violations could trigger administrative discipline or criminal prosecution under federal law or the Uniform Code of Military Justice.

A Policy Born of a $409,000 Bet

The memo follows mounting scrutiny of military personnel wagering on prediction markets tied to real-world operations. In April, federal investigators arrested Army Master Sgt. Gannon Ken Van Dyke, a Special Forces soldier who took part in the raid that captured Venezuelan leader Nicolas Maduro, alleging he placed more than $33,000 in Polymarket bets on the timing and outcome of the operation within hours of Trump's announcement of Maduro's capture — and won more than $409,000. Van Dyke has pleaded not guilty in New York federal court.

That case, and a separate episode in which a Polymarket contract on a downed U.S. airman's rescue drew public criticism, had already pushed members of Congress to act. Rep. Eugene Vindman led 15 lawmakers in a bipartisan letter to the Pentagon this year urging exactly the kind of general order Hegseth has now issued, including a request that violators face accountability under military law. Polymarket itself has pointed to the Van Dyke prosecution as proof its own systems work, telling reporters the case showed federal authorities "is proof the system works" when insider betting surfaces.

The House Armed Services Committee's draft annual defense policy bill had already proposed directing Hegseth to write such a rule, though that provision's path through Congress was uncertain. Thursday's memo effectively overtakes that legislative process by imposing the restriction administratively, immediately, across the department.