Pentagon bars personnel from using nonpublic information to bet on Polymarket, Kalshi

Aerial view of the Pentagon in Arlington, Virginia. — Staff Sgt. Brittany Chase / U.S. Department of Defense (Public Domain)

Summary

Defense Secretary Pete Hegseth's Oct. 20 memo prohibits Defense Department personnel from using nonpublic government information for financial transactions.
It explicitly names prediction markets Polymarket and Kalshi and covers classified and unclassified information.
The memo warns of administrative, disciplinary and, where appropriate, criminal consequences; it does not prohibit all prediction-market trading by personnel.

Memo names prediction markets

A Defense Department directive bars military and civilian personnel from using nonpublic government information to make financial wagers, including on prediction markets Polymarket and Kalshi. Defense Secretary Pete Hegseth signed the one-page memo on Oct. 20; CBS News and The Associated Press published accounts of it two days later, and CBS posted the document itself.^{[1] [2]}

The memo says the restriction applies whether the information is classified or unclassified. It warns that trades tied to military outcomes can create signals about operations that foreign adversaries may analyze, and says violations could lead to administrative or disciplinary action and, where appropriate, prosecution under federal law or the Uniform Code of Military Justice.^{[1] [2] [3]}

The directive is narrower than a blanket ban on prediction-market use: its stated restriction concerns financial transactions that use nonpublic information. The document names Polymarket and Kalshi as examples alongside traditional betting platforms.^{[1] [2]}

A response to security and integrity concerns

Hegseth's memo says activity around a military outcome could reveal operational details and create financial conflicts for officials whose work touches those outcomes. In the document, he warned that adversaries watch activity in prediction markets and that financial stakes could affect the judgment of personnel involved in planning or analysis.^{[1] [2] [3]}

The directive follows the federal case against Army Master Sgt. Gannon Ken Van Dyke. Prosecutors allege that he used classified information connected to the January operation to capture then-Venezuelan President Nicolás Maduro to place more than $32,500 in Polymarket bets; AP reported that the bets generated more than $400,000. Van Dyke has pleaded not guilty, according to CBS. The allegations remain unresolved in court.^{[2] [3]}

The newly published memo establishes the Defense Department's internal rule but does not itself settle how prediction markets should be regulated generally. The trend spike's precise cause is not independently verified; the directive's explicit naming of Polymarket, reported across national outlets, is a plausible news hook rather than proof of why people searched for the company.^{[1] [2] [3]}

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