  We examine millisecond magnetars as central engines of Gamma Ray Bursts'
(GRB) prompt emission. Using the proto-magnetar wind model of Metzger et al.
2011, we estimate the temporal evolution of the magnetization and power
injection at the base of the GRB jet and apply these to different prompt
emission models to make predictions for the GRB energetics, spectra and
lightcurves. We investigate both shock and magnetic reconnection models for the
particle acceleration, as well as the effects of energy dissipation across
optically thick and thin regions of the jet. The magnetization at the base of
the jet, $\sigma_0$, is the main parameter driving the GRB evolution in the
magnetar model and the emission is typically released for $100\lesssim \sigma_0
\lesssim 3000$. Given the rapid increase in $\sigma_0$ as the proto-magnetar
cools and its neutrino-driven mass loss subsides, the GRB duration is typically
limited to $\lesssim 100$ s. This low baryon loading at late times challenges
magnetar models for ultra-long GRBs, though black hole models likely run into
similar difficulties without substantial entrainment from the jet walls. The
maximum radiated gamma-ray energy is $\lesssim 5 \times 10^{51}$erg,
significantly less than the magnetar's total initial rotational energy and in
strong tension with the high end of the observed GRB energy distribution.
However, the gradual magnetic dissipation model (Beniamini & Giannios 2017)
applied to a magnetar central engine, naturally explains several key
observables of typical GRBs, including energetics, durations, stable peak
energies, spectral slopes and a hard to soft evolution during the burst.
