The emerging ability to bet on future events using online prediction platforms puts a new twist on classified information: Now there are ways to profit from that insider information.
The arrest in April of Army Master Sgt. Gannon Ken Van Dyke, a Green Beret, on charges of insider trading, wire fraud, and making an illegal transaction, makes clear, however, the risks of placing such bets.
Exactly what the law is in this case is still an open question. Van Dyke is facing civilian, not military charges, and the Uniform Code of Military Justice is silent on the matter, according to several legal experts interviewed by Air & Space Forces Magazine. Also unclear: Whether placing a bet based on classified knowledge is the same as illegally leaking that information.
Van Dyke, 38, allegedly used his inside knowledge of military plans for the January raid on Venezuela and capture of former president Nicholas Maduro. The Soldier allegedly placed a series of bets worth about $33,000 on the website and nabbed more than $400,000 in profits, according to court documents.
Van Dyke is being prosecuted under the Commodity Exchange Act, which prohibits federal employees from trading on confidential information to which they have access.
Predication market “contracts” are defined as commodities under the law. Although popularly referred to as bets or wagers, users are actually buying into a contract that pays off—or not—depending on future events. That makes them akin to a commodity, such as oil or soybean futures, which are effectively wagering on the future price of those products.
Van Dyke’s case marks the first time the Commodities Futures Trading Commission, which asserts exclusive jurisdiction over prediction markets, has charged someone with insider trading for placing bets on events.
“I have been crystal clear that anyone who engages in fraud, manipulation, or insider trading in any of our markets will face the full force of the law,” said Commission Chairman Michael S. Selig in an April 23 release. “The defendant was entrusted with confidential information about U.S. operations and yet took action that endangered U.S. national security and put the lives of American service members in harm’s way.”
It is not, however, the first time anyone has been charged in relation to insider knowledge; the Israeli government charged one of its military reservists in February, alleging the soldier and an accomplice placed bets on Polymarket regarding Israel’s 12-day war with Iran in 2025.
The Pentagon press office declined to answer questions about policies governing troops’ use of prediction markets. A Department of the Air Force spokesperson said the department prohibits the disclosure of classified or controlled information, and all Airmen and Guardians are required to complete annual operations security awareness training.
“Unauthorized disclosure of protected information carries severe consequences,” the spokesperson wrote, “ranging from administrative action to prosecution under the Uniform Code of Military Justice.”
Colby Vokey, a civilian attorney and retired Marine Corps judge advocate general, said potential consequences range from non-judicial punishment for inadvertent disclosure to treason for more severe breaches.
Any service member with a security clearance must sign a nondisclosure agreement stating that they will not disclose classified information to unauthorized personnel.
Prediction markets have risen in popularity in recent years as a way for users to bet on whether certain events will occur. On Polymarket, a “markets team” creates event predictions based on input from the community of users and presents questions related to the event. Users pick their prediction with a yes/no answer.
According to legal documents, questions Van Dyke bet on included: “Maduro out by January 31, 2026?” “U.S. Forces in Venezuela by…January 31?” and “Trump invokes War Powers against Venezuela by…January 31?”
In Van Dyke’s case, federal prosecutors allege that the special operations Soldier placed multiple bets worth more than $33,000 on Polymarket leading up to the capture of Venezuelan dictator Nicholas Maduro on Jan. 3. Those bets paid off to the tune of more than $400,000.
Then, in the wake of Maduro’s capture, reports emerged about those Polymarket wagers.
Appearing in a New York federal court on April 26, Van Dyke pled not guilty to charges of wire fraud, commodities fraud, theft of nonpublic government information, and the use of confidential information for personal gain.
Since then, public criticism of the bets has been frequent, including a flurry of posts on X, news articles, and comments from members of Congress.
Rep. Pat Harrigan (R-N.C.), a former Green Beret who sits on the House Armed Services Committee, wrote that placing such bets could have jeopardized the operation.
“By allegedly placing this bet, this Special Operator endangered his brothers in arms, period,” Harrigan tweeted.
Immoral or Illegal
While experts interviewed agreed that Van Dyke’s alleged conduct crossed an ethical line, they varied on whether it was illegal or a violation of official policy.
Existing policies may not cover prediction markets, which are relatively new, Vokey said. It’s also debatable whether placing a bet on such a market constitutes disclosing classified information, lawyers said.
Former Secretary of the Air Force Whitten Peters, now a civilian attorney, said the rules for troops around the use of the prediction markets are vague and ambiguous.
“The law in this area could be much more clear if DOD simply put out a regulation saying nobody is allowed to trade on confidential information they receive in the course of their duties.”
And such a regulation would not only cover prediction markets. Peters used the example of a military member who knew about an upcoming defense contract award and used that information to buy stocks.
The former Air Force general counsel said that someone betting on prediction markets could face UCMJ charges under Article 92, dereliction of duty, which covers the use of information that’s expected to be kept secret, or Article 121, which covers larceny or theft. But he said that’s a complex legal definition.
“You’d have to be a lawyer to figure out that that’s possibly theft of government information,” Peters said.
Ultimately, what the Soldier did was gambling, said Joshua E. Kastenberg, a professor at the University of New Mexico law school and retired Air Force lawyer.
“If he accessed the government system and ran the odds in his head and didn’t share the information that he got and placed a bet, it’s immoral—it may be highly immoral—but I don’t see it violating the UCMJ,” Kastenberg said.
To convict him, military prosecutors would need to find a prohibition on using prediction markets in defense policy, training, or briefings, Katzenberg said. But prosecutors would have options how to pursue a case.
For example, Article 134 of the UCMJ—the “catch-all” article frequently used by prosecutors to charge troops with failure to follow orders or bringing discredit to the military—could apply.
Todd Huntley, director of the Georgetown National Security Law Program, cited DOD’s Joint Ethics Regulation, which sets standards of conduct for military members.
“All DOD personnel must be committed to our high standards of ethical conduct and policies,” the regulation states. Using classified information for personal gain could be seen as violating that ethical standard, Huntley said.
While there isn’t a single clear point of violation, all of these come together, said Huntley, a retired Navy lawyer: “It’s kind of a web of regulations, standards of conduct, and criminal statutes.”
Former Air Force Chief of Chaplains Randall Kitchens addressed the ethical bar. Whether betting on operations is legal or not, troops should know better, he said, given the frequent instructions they receive on protecting operational security, which carries an ethical duty to protect their fellow service members.
“I think this really boils down to what is the greater good of the mission,” Kitchens said. “Disclosing that or betting on that for the sake of money is not. It raises ethical flags for me because that is not really embracing what is the greater good of the mission or the team.”
Extra Duty to Protect
According to court documents, Van Dyke twice signed Sensitive Compartmented Information Nondisclosure Agreements, a more extensive NDA than is used for standard security clearances.
The first time was in 2018, when he committed to never divulge anything marked as sensitive or that he knew to be sensitive information as part of his work for the U.S. Army Special Operations Command.
Then, on Dec. 8, 2025, a month before the Maduro raid, he signed another SCINA, which noted that he would have access to “information, material, and plans, which concern the security of the United States.” This document highlighted key elements of the upcoming mission.
“Van Dyke further agreed that classified or sensitive information he acquired in connection with his association with ‘USASOC operations within the Western Hemisphere remains the property of the Government of the United States of America,” according to his indictment.
Those contracts are intended to add an extra layer of protection for operations, experts said.
Georgetown’s Huntley said that the documents remind the individual that the information they’re receiving is sensitive and can serve as evidence in a criminal trial.
“I doubt he’s the only one that’s done this,” Huntley said. “It’ll be interesting to see if there are others who are discovered and charged.”
Insider Trading and the Government
Both the White House and the Senate have introduced new prohibitions on betting in prediction markets over the past six weeks.
On March 24, the day before President Trump announced the Iran ceasefire, a White House Management Office email warned staffers that “government ethics regulations prohibit the use of nonpublic government information for the private benefit of an employee or any other third party,” CBS News reported.
A month later, the Senate unanimously passed a rule banning senators and staffers from trading on prediction markets.
These actions followed news reports about bets made on prediction markets about the Iran War, the death of Ayatollah Ali Khamenei, and whether ground forces set foot in Iran, among others.
A recent report by the nonprofit Anti-Corruption Data Collective found “disproportionately high” longshot success rates of 52 percent involving military events on Polymarket. Overall, other high-risk, low-probability longshot bets exhibit a success rate of just 14 percent, according to the report.
The nonprofit measured Polymarket data from January 2021 to the first half of March 2026, focusing specifically on “political markets,” with military events as a subset.
The analysis highlighted 19 longshot bets wagering $164,292 in the hours preceding Operation Midnight Hammer in June 2025. Eight users raked in $1.8 million in total profit on those bets, “despite the strike relying on deception, decoy bombers, and stealth aircraft that left no public signal of timing,” the report noted.