---
title: "Pentagon Officials Warned Against Using Non-Public Information for Personal Gain Through Prediction Markets"
url: https://noti.group/pentagon-officials-warned-against-using-non-public-information/
language: en
publisher: "Noti Group"
section: "Technology"
published: 2026-10-23T20:28:43.000Z
updated: 2026-10-24T01:50:36.375Z
id: 5901387b-c38b-4c5e-a991-8f3d4933f621
source: "Ars Technica https://arstechnica.com/tech-policy/2026/10/pentagon-memo-on-prediction-markets-says-insider-bets-put-troops-lives-at-risk/"
attribution: "Link to https://noti.group/pentagon-officials-warned-against-using-non-public-information/ and name Noti Group when you quote or summarize this story."
---

# Pentagon Officials Warned Against Using Non-Public Information for Personal Gain Through Prediction Markets

Defense Secretary Pete Hegseth has issued a memo to senior Pentagon officials warning against using non-public information for personal financial gain through prediction markets. The memo, dated October 20, emphasizes that such actions can compromise military operations and put troops at risk.

The memo was sent to senior leaders within the Defense Department, as well as Combatant Command leaders and field activity directors. Hegseth's message is clear: using non-public information for personal financial gain undermines trust in military personnel and creates vulnerabilities for enemy intelligence services to exploit.

According to Hegseth, movements on prediction markets can be monitored by hostile foreign entities. When US service members or Defense Department civilians engage in financial transactions related to military outcomes, they inadvertently create signals that can be used against them. These signals can be aggregated and correlated with other information, allowing enemies to anticipate and prepare for potential operations.

The lives of US troops often depend on the element of surprise, and Hegseth stressed that this should not be compromised for personal financial gain. Military personnel are expected to uphold a high level of integrity and protect their colleagues, rather than putting them at risk through reckless behavior.

A recent example of such reckless behavior involves a US Army soldier who was arrested in April for using confidential information to make $410,000 in bets on the capture of Venezuelan President Nicolás Maduro. Additionally, an August report highlighted 152 suspicious wallets that placed longshot bets on military and defense markets and won a combined $8 million.

Defense Department personnel are prohibited from engaging in financial transactions that use nonpublic information, according to a memo issued by Hegseth.

The prohibition applies to all financial platforms, including traditional betting services and prediction markets such as Polymarket and Kalshi. This means that even if the information is not classified, it cannot be used for personal gain through financial transactions.

Hegseth's memo emphasizes that this rule is in place to prevent defense personnel from allowing their judgment to be warped by financial interests. He notes that having a stake in an outcome can create a conflict of interest and compromise one's ability to make objective decisions.

This warning is particularly relevant for individuals whose jobs involve making predictions or analyzing data, as they may have a personal interest in the outcomes of certain events. For example, a logistician who has bet on a strike date may find themselves biased towards that date.

Kalshi and Polymarket both prohibit insider trading, but the threat of criminal charges under the Uniform Code of Military Justice and/or applicable federal law is a more significant deterrent than being banned from their platforms.

The Trump administration had previously issued warnings against using private information to trade on prediction markets. A group of new accounts on Polymarket made highly specific bets on a US-Iran ceasefire just before it was announced, resulting in substantial profits for the account holders.

A Trump teleprompter aide reportedly made a substantial profit of $100,000 by betting on what President Trump would say in prepared remarks using Kalshi, a prediction market platform.

The Trump administration's lax regulatory approach has enabled the growth of prediction markets, which are now facing opposition from state governments seeking to impose restrictions. The federal government argues that these regulations are preempted by the Commodity Futures Trading Commission's jurisdiction, but courts have reached conflicting conclusions, prompting a push for Supreme Court intervention.

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Source: [Ars Technica](https://arstechnica.com/tech-policy/2026/10/pentagon-memo-on-prediction-markets-says-insider-bets-put-troops-lives-at-risk/)  
Published by Noti Group: https://noti.group/pentagon-officials-warned-against-using-non-public-information/