Service members and Pentagon civilians are being warned about prediction markets.
A draft defense policy before Congress would prohibit them from using the markets to bet on global events. The bill would require the defense secretary to issue related regulations and punishments.
The proposal follows allegations that a U.S. soldier used classified information to bet on the capture of Venezuelan President Nicolás Maduro.
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Gannon Ken Van Dyke, a U.S. Army soldier, was charged with unlawful use of confidential government information.
“Prediction markets are not a haven for using misappropriated confidential or classified information for personal gain,” said U.S. Attorney Jay Clayton for the Southern District of New York. “The defendant allegedly violated the trust placed in him by the United States Government by using classified information about a sensitive military operation to place bets on the timing and outcome of that very operation, all to turn a profit. That is clear insider trading and is illegal under federal law."
Nearly $64 billion was spent on prediction markets last year. Users are betting on the outcomes of future events, ranging from the winner of the NCAA basketball tournament to the weather in New York and when Taylor Swift will get married.
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Legislation has also been introduced to ban federal election officials from insider trading. An intelligence firm found six suspected insiders made more than $1 million last month betting on a U.S. strike on Iran, with some bets placed just hours before the attack.
