Pentagon directive bans troops from using nonpublic info to bet in prediction markets

Pentagon directive bans troops from using non‑public info to bet in prediction markets The U.S. Department of Defense has issued a sweeping new directive that bars all active‑duty service members from using “non‑public information” to place bets in any form of prediction market. The order, signed by Defence ary Pete Hegseth on Tuesday, comes after a series‑of internal investigations that uncovered a small but growing number of personnel leveraging classified or otherwise privileged data to speculate on outcomes ranging from geopolitical events to defence procurement contracts..

The move is being presented as a necessary step to protect national security and maintain the integrity of the armed forces. In the directive, the Pentagon defines “non‑public information” as any data, analysis, or insight that is not generally available to the public and that could be obtained by virtue of a service member’s rank, clearance level, or assignment. This includes, but is not limited to, classified intelligence reports, internal briefing documents, and unreleased procurement schedules..

The ban applies to all forms of prediction markets – from formal, regulated exchanges to informal, crowd‑sourced platforms – and covers both monetary and non‑monetary wagering. ary Hegseth explained the rationale behind the policy in a brief statement to the press. “Our service members are trusted with the nation’s most sensitive information,” he said..

“When that trust is leveraged for personal financial gain, it erodes public confidence and risks exposing critical data to adversaries. This directive reaffirms our commitment to the highest ethical standards.” The statement underscored that the ban is not a punitive measure against gambling per se, but a targeted response to the misuse of privileged knowledge. The new rule follows a series of high‑profile cases that have attracted media attention in recent months..

In one instance, an Army officer stationed in Germany was found to have placed bets on the outcome of a NATO summit using briefing notes not yet released to the public. In another, a Navy analyst was alleged to have used early intel on a cyber‑attack to trade on a private prediction platform. Both investigations were closed without criminal charges, but they prompted senior officials to re‑examine existing policies..

Legal experts note that the directive aligns the Pentagon’s internal regulations with existing civilian securities laws, which already prohibit insider trading in public markets. However, the unique nature of prediction markets – often operating in legal gray areas and sometimes outside the purview of traditional financial regulators – creates additional challenges. “The government is essentially extending the concept of insider trading to a broader set of speculative activities,” said Dr Marilyn Clarke, a professor of national security law at Georgetown University..

“It’s a logical progression, but enforcement will be tricky.” To enforce the ban, the Department of Defense will establish a new compliance unit within the Office of the Inspector General. This unit will be tasked with monitoring online activity, reviewing financial disclosures, and conducting random audits of service members’ accounts on known prediction platforms. The policy also requires all personnel to undergo mandatory training on the proper handling of non‑public information, with refresher courses every two years..

Violations could result in disciplinary action ranging from reprimands to court‑martial, depending on severity. The Pentagon has reached out to the operators of major prediction markets, including both commercial exchanges and academic research platforms, to inform them of the new restrictions. Companies have been asked to flag accounts linked to U.S..

military email addresses and to cooperate with any investigations. Some platforms have already pledged to block access for service members who fail to certify compliance. “We welcome clear guidance,” said a spokesperson for Predictive Insights, a leading prediction‑market provider, “and we will work with the DoD to ensure the integrity of our data.” Reaction from within the armed forces has been mixed..

A senior officer, speaking on condition of anonymity, expressed concerns that the policy could unintentionally hamper legitimate analytical work. “Our analysts often discuss scenarios in private briefings,” he said. “The line between ‘discussion’ and ‘betting’ can be blurry, and we need clear parameters to avoid over‑penalisation.” Others welcomed the move, arguing that it sends a strong message about ethical conduct and helps to preserve public trust in the military institution..

Congressional leaders have also weighed in. A bipartisan group of lawmakers introduced a resolution urging the Department of Defense to report annually on the directive’s implementation and any identified breaches. “Transparency is essential,” said Representative Laura Whitman (D‑OH), a member of the Armed Services Committee..

“If we are to protect our national security, we must also be accountable to the American people.” The resolution is expected to move to committee later this month. The new policy arrives at a time when prediction markets are gaining prominence as tools for forecasting everything from election outcomes to disease outbreaks. Their appeal lies in aggregating diverse viewpoints into probabilistic forecasts, often outperforming traditional expert analysis..

However, critics have long warned that the markets could be vulnerable to manipulation if insiders with privileged data are allowed to participate. The Pentagon’s ban is thus part of a broader conversation about the ethical use of emerging data‑driven technologies. In the weeks ahead, the Department of Defense plans to release a detailed FAQ for service members, outlining permissible activities and offering guidance on how to report suspected violations..

The FAQ will also clarify that non‑monetary participation – such as “play‑money” contests that do not involve real stakes – remains permissible, provided no non‑public information is used. Officials hope that clear communication will reduce confusion and encourage compliance.