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- The Project On Government Oversight (POGO) is urging leaders of the Senate Armed Services Committee to strengthen language in the fiscal year 2027 National Defense Authorization Act (NDAA) to explicitly ban all Department of Defense personnel from trading on prediction markets.
- Citing the recent federal indictment of a U.S. Special Forces soldier who allegedly used classified military intelligence to profit over $400,000 on Polymarket, the watchdog group argues that the Senate’s current NDAA draft is too narrow, pressing Congress to enact a strict blanket trading ban, mandate public financial disclosures, and clearly define penalties to protect national security.
The Project On Government Oversight is urging Senate Armed Services Committee leaders to strengthen fiscal year 2027 NDAA language covering prediction markets, including by banning all Department of Defense trading on them.
In a policy letter dated Sept. 29, POGO told Chairman Roger F. Wicker and Ranking Member Jack Reed that the Senate draft does not go far enough to address insider-trading and national security risks tied to military-related event contracts. The group said the current language would still allow some trading unless officials can show material nonpublic information was used.
POGO says current NDAA draft leaves enforcement gaps
According to POGO, Section 1081 of the Senate NDAA draft would require covered transactions above $250 to be reported to a designated agency ethics official. But the watchdog argued that standard is too narrow and leaves major compliance questions unresolved.
In the letter, POGO wrote, “POGO urges Congress to prohibit any and all trading on prediction markets within the Department of Defense, irrespective of the trade value or whether material nonpublic information was used.”
The group also said the draft does not clearly state whether there are penalties for failing to report trades. It further argued that penalties should not be left undefined for the Department of Defense to prescribe later.
POGO asked Congress to make financial disclosures submitted to the designated ethics official public, saying transparency would strengthen oversight.
Letter points to recent Polymarket-linked indictment
POGO said recent public reporting has shown that military-related prediction markets may be vulnerable to insider trading. As an example, the letter cited the recent indictment of Special Forces soldier Gannon Ken Van Dyke, who was charged with allegedly using classified information to place a trade on Polymarket.
According to the letter, that trade allegedly generated more than $400,000 in profit.
POGO opened by praising lawmakers’ broader effort to address the issue, writing that “POGO commends members of Congress for their concerted efforts to prohibit trading based on material nonpublic information within the military and to bar betting on and profiting off of event contracts related to military matters.” It closed by arguing that “The public deserves a military that always prioritizes national security and is not compromised by opportunities for private profit.”
What to watch in the NDAA process
The immediate question is whether any of POGO’s recommendations will be added to the final NDAA text. The letter focuses on stronger statutory language, a broader Defense Department trading ban, clearer reporting obligations, and defined penalties.
For prediction market operators and compliance teams, the issue is less about a finalized new rule today than about whether Congress ultimately adopts stricter restrictions on military-related event contracts and Defense Department participation in those markets.
Source: As reported by Janice Luong; Virginia Burger.
