US defence secretary warns staff against trading on military information

US Defense Secretary Pete Hegseth has warned Department of Defense personnel against carrying out financial transactions based on non-public information, including trading on prediction markets and sports betting platforms. In a letter dated 20 October, Hegseth said such activity is not permitted, whether conducted directly or through another person, according to the letter as reported.

Hegseth wrote that foreign intelligence services monitor trading activity for patterns that could reveal details of US military operations. He said a service member, intelligence professional or other department civilian who trades on a military outcome creates a signal that adversaries could analyse alongside other information to anticipate movements, targets and timing, and that this could put US personnel at greater risk. He also said betting on military outcomes could affect discipline and distract personnel from their duties.

Separately, the Anti-Corruption Data Collective raised concerns in August about trading patterns across prediction markets. The group identified 152 accounts whose contracts were tied to US military operations and which were suspected of relying on nonpublic information. Its findings state that these accounts won 97.2% of the time, turning $2 million in trades into approximately $8 million in profits.