Draft Defense Bill Would Bar US Troops From Prediction Markets After $400,000 Maduro Bet
Updated
Updated · CNN · Jun 2
Draft Defense Bill Would Bar US Troops From Prediction Markets After $400,000 Maduro Bet
3 articles · Updated · CNN · Jun 2
House Armed Services Committee draft language would require Defense Secretary Pete Hegseth to ban troops and Pentagon civilians from trading on prediction markets when they hold or could reasonably obtain nonpublic information.
The push follows the first known federal insider-trading case tied to prediction markets: a US special forces soldier accused of using classified information to make about $400,000 betting on Nicolás Maduro’s capture; he has pleaded not guilty.
The provision goes beyond existing insider-trading law by covering unclassified nonpublic information and could expose violators to military punishment, including potential criminal charges under the Uniform Code of Military Justice.
The proposal lands as Kalshi and Polymarket surge in popularity, offshore war-related markets remain accessible to Americans via VPNs, and lawmakers question whether the understaffed CFTC can police suspicious geopolitical trades.
Similar restrictions are already spreading across government, with the Senate, some House offices, and governors in California and Illinois moving to curb prediction-market use tied to insider information.
Is insider trading making prediction markets too dangerous to exist?
How can the Pentagon police secret financial bets on anonymous offshore platforms?
Could spy agencies turn these risky prediction markets into forecasting tools?
The Van Dyke Scandal: How a $25 Billion Prediction Market Exposed National Security Flaws and Sparked a Regulatory Showdown
Overview
The indictment of Master Sgt. Gannon Ken Van Dyke for allegedly using classified information to profit on prediction markets sparked an immediate and strong response from U.S. authorities. This high-profile case exposed serious national security vulnerabilities and led the White House to issue direct warnings to staff about insider trading risks. The scandal highlighted the urgent need for stronger defense policies and increased vigilance, as it revealed how prediction markets can be exploited for financial gain using sensitive government information. The incident has intensified scrutiny on regulatory gaps and prompted calls for robust safeguards to protect national interests.