Pentagon Bans Troops From Using Nonpublic Information for Prediction Market Bets

Defense Secretary Lloyd Austin has issued a new directive barring troops from using "nonpublic information" to make bets on prediction markets. The memo, dated Tuesday and reviewed by The Associated Press, aims to prevent service members from creating potential "signals" that adversaries could monitor.

"Our enemies watch movements in these markets," Austin wrote in the directive. "When an American Service member, intelligence professional, or other Department civilian engages in a financial transaction on a military outcome, they create a signal."

The directive comes months after a U.S. Special Forces soldier was charged with using classified information about a military operation to capture then-Venezuelan President Nicolás Maduro to win more than $400,000 on the prediction market Polymarket. The soldier, Master Sgt. Gannon Ken Van Dyke, 38, was charged by federal prosecutors and regulators in April for allegedly placing bets between Dec. 30 and Jan. 2 on when Maduro would be removed from power. The majority of these bets were reportedly placed hours before U.S. missiles struck Caracas.

The Pentagon memo emphasizes that troops are forbidden from using both classified and unclassified but nonpublic information to trade on platforms such as Polymarket and Kalshi. Violators could face administrative punishment or criminal charges under the Uniform Code of Military Justice or federal law.

"Beyond operational security, financial stakes can warp judgment," Austin stated in the memo. "A logistician with money riding on a strike date has an interest in that date. An analyst with a position on an outcome has an interest in that outcome."

Concerns about government officials and employees using insider information for prediction market bets extend beyond the Department of Defense. In April, accounts on Polymarket made highly specific, well-timed bets on whether the U.S. and Iran would reach a ceasefire before President Donald Trump announced it. These bets resulted in hundreds of thousands of dollars in profits for new customers. The White House warned its staff against using private information for such trades on the same day a report on the matter was released.

Separately, the prediction market Kalshi fined and suspended three congressional candidates in April who allegedly wagered on the outcomes of their own elections.