he was more incentivized for the mission to succeed? how horrible!

He was incentivized to win the bet. The military does not want people to have outside loyalties because that creates problems any time they’re not perfectly aligned – for example, if they had orders to minimize team or civilian casualties you don’t want this guy starting a messy firefight because he’s thinking the target is getting away and willing to risk someone else’s lives for half a million dollars.

You also have to think about leaning information: if people do this, bodyguards around the world are going to monitor betting markets looking for unexplained changes. The military doesn’t like anything which can leak timing information since that increases the risk of a mission failing.