Online prediction market Kalshi has been temporarily banned from operating in Nevada after a Carson City judge granted the state a 14-day restraining order against the company. 

It's the first time that Kalshi has been banned from operating by a U.S. state. 

The decision is the latest development in what is expected to be a long legal battle between Kalshi and the state that began last March when the state's Gaming Control Board sent a cease and desist letter to the company.

Unlike traditional sports bettors or online gaming companies such as FanDuel or DraftKings, Kalshi is regulated by the Commodity Futures Trading Commission, which oversees "futures contracts." However, Nevada and other gaming authorities have argued that the prediction market platform is a roundabout way of offering sports bets without complying with the state's regulatory structure for gambling.

In a statement to The Nevada Independent, Chairman of the Nevada Gaming Control Board Mike Dreitzer said the lawsuit was about safeguarding Nevadans from illegal gambling. 

"Kalshi has repeatedly stated that its operations are legal in 50 states, which is clearly not true," Dreitzer said. "Prediction markets, to the extent they facilitate unlicensed gambling, are illegal in Nevada, and we have a statutory duty to protect the public."

In February, the state filed a lawsuit stating that Kalshi should be regulated as a gambling company and that the company has been violating Nevada laws. That same month, the 9th Circuit Court of Appeals paved the way for the state to bar the company from offering sports contracts in the state. 

Kalshi declined a request for comment on the lawsuit. 

According to thread on X from Daniel Wallach, a sports betting lawyer, temporary restraining orders such as the one against Kalshi are not appealable by Nevada law, which means that Kalshi must exit the state "in the interim." 

The rise of prediction markets has been a contentious issue for Nevada and Las Vegas, where the gaming industry is "vitally important to the economy of the State and the general welfare of its inhabitants," according to the lawsuit filed by the control board in February. 

This year, Nevada sportsbooks saw the lowest number of Super Bowl bets in a decade, according to the gaming control board. Roughly 90 percent of Kalshi's bets go toward sports.

Kalshi is also involved in legal battles across the country. Earlier this week, Arizona Attorney General Kris Mayes filed criminal charges against the company for "illegal gambling."