MADRID, May 26 (Reuters) - Spain's Consumer Rights Ministry temporarily banned so-called prediction markets Polymarket and Kalshi for operating in the country without a gambling licence, the official state gazette showed on Tuesday.

o In a statement, the ministry said its gambling watchdog had opened a probe into the U.S.-based companies for allegedly breaching local rules by lacking mandatory administrative authorisation.

o The ban will last an estimated three or four months until the probe's completion, it said.

o Prediction market users buy and sell stakes on the outcome of future events, with prices reflecting the probability of one outcome or another occurring.

o Spain - like other European jurisdictions - considers prediction markets a form of gambling when bets are placed on uncertain outcomes.

o The ministry said unauthorised operators lack the required technical and regulatory safeguards like identity verification systems, access control mechanisms for minors and for people who have self-excluded or are banned from gambling, as well as the standards needed to protect users.

o Once a niche corner of the internet, prediction markets have mushroomed into a multi-billion-dollar industry after gaining a foothold in U.S. politics in 2024.

(Reporting by David Latona; Editing by Thomas Derpinghaus)