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Congress Moves to Ban Prediction Market Bets for Military, Pentagon Personnel
• A draft defense bill in Congress proposes banning all US service members and Pentagon civilians from betting on global events via prediction markets.
• The legislation follows federal charges against a US Army soldier accused of using classified intelligence to wager on a sensitive military operation involving Venezuela.
• The proposed law mandates the Defense Secretary to establish specific regulations and punishments for any violations of the new prohibition.
• This action coincides with surging public concern as the prediction market industry reached nearly $64 billion in wagers last year.
In a decisive move to safeguard national security and military integrity, U.S. lawmakers are advancing legislation that would explicitly prohibit service members and Department of Defense civilians from participating in prediction markets. The measure, embedded within the draft National Defense Authorization Act (NDAA), seeks to close a perceived vulnerability by banning bets on world events, requiring the Secretary of Defense to codify enforcement regulations and disciplinary actions.
The legislative push is a direct response to a high-profile criminal case that exposed the potential for insider trading within these markets. U.S. Army soldier Gannon Ken Van Dyke faces federal charges for allegedly exploiting classified information to place bets on the capture of Venezuelan President Nicolás Maduro. “Prediction markets are not a haven for using misappropriated confidential or classified information for personal gain,” stated U.S. Attorney Jay Clayton for the Southern District of New York, equating the alleged actions to illegal insider trading. This incident has underscored fears that personnel with access to sensitive intelligence could monetize that access on platforms where users wager on outcomes ranging from geopolitical events to entertainment.
The proposed ban reflects broader governmental scrutiny of the rapidly expanding prediction market industry, which saw nearly $64 billion in wagers last year. Parallel legislative efforts are underway to prevent federal election officials from engaging in similar insider trading. The scale of the issue was further highlighted by an intelligence firm's report identifying six suspected insiders who allegedly profited over $1 million from bets placed on a U.S. military strike on Iran, with some transactions occurring mere hours before the operation. As Congress finalizes the NDAA, this provision signals a growing consensus on the need for clear ethical boundaries to protect sensitive government operations from financial exploitation.