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State of Play’s TL;DR
- The Pentagon issued a new directive barring troops and other Defense Department personnel from using classified or other nonpublic information to trade on prediction markets.
- Violators could face administrative penalties or criminal charges.
The Pentagon has issued a new directive barring troops and other Defense Department civilians from using nonpublic information to bet on prediction markets, including platforms such as Polymarket and Kalshi.
According to the reported memo, the rule covers both classified information and unclassified but nonpublic information. Violators could face administrative punishment or criminal charges under the Uniform Code of Military Justice or federal law.
Pentagon says prediction market activity can create security risks
Defense Secretary Pete Hegseth said in the memo that prediction market activity by military or defense personnel can create signals that adversaries may watch.
“Our enemies watch movements in these markets. … Beyond operational security, financial stakes can warp judgment.”
The directive goes beyond classified material alone. It also applies to unclassified information that is not public, a broad restriction aimed at limiting insider advantages in military-related event contracts.
Directive follows prior case tied to Polymarket
The move comes months after a case cited in the report involving a US Special Forces soldier accused of using classified information to profit on Polymarket.
Master Sgt. Gannon Ken Van Dyke, 38, was charged in April by federal prosecutors and regulators. He allegedly used classified information about a mission and won more than $400,000 on Polymarket. He placed more than $32,500 in bets on when Venezuelan leader Nicolás Maduro might be removed from power.
Based on reporting by Konstantin Toropin for The Associated press via Gulf Coast News.
