Praise be to Allah.
This kind of play is not permissible, and it comes under the heading of gambling, which is haraam, because what is meant by gambling, as was stated by Shaykh al-Islam Ibn Taymiyah, is that a person’s money is taken when he is not sure whether he will get anything in return or not.
End quote from Majmoo‘ al-Fataawa (19/283).
Abu’l-Baqa’ al-Hanafi said: Any game in which it is stipulated that the winner will take something from the loser comes under the heading of gambling.
End quote from al-Kulliyyaat (p. 702)
Gambling is haram according to consensus because Allah, may He be exalted, says (interpretation of the meaning):
“O you who believe! Intoxicants (all kinds of alcoholic drinks), gambling, al-Ansaab [sacrifices for idols, etc.] and al-Azlaam [arrows for seeking luck or decision] are an abomination of Shaytaan’s handiwork. So avoid (strictly all) that (abomination) in order that you may be successful”
[al-Maa’idah 5:90].
This definition of gambling is applicable to the kind that you asked about. Regardless of whether what the winner takes is less than what he paid, or more, or the same, it still comes under the heading of gambling in all these cases. Any transaction in which there will either be a loser or a winner comes under the heading of gambling which is haram. Allah, may He be exalted, says (interpretation of the meaning):
“O you who believe! Eat not up your property among yourselves unjustly except it be a trade amongst you, by mutual consent”
[an-Nisa’ 4:29].
Al-Baghawi said in his tafseer of this verse: “O you who believe, do not consume one another´s property by unjust means” i.e., harâm means, that is, through riba, gambling, plundering, stealing, treachery and so on.
End quote from Tafseer al-Baghawi (2/199)
Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him) was asked about the kind of gambling that is very similar to this, and among the things he said in his reply was:
What the questioner describes, where a person buys a ticket then if he is lucky – as he says – he gets a lot of money, comes under the heading of gambling, of which Allah says (interpretation of the meaning):
“O you who believe! Intoxicants (all kinds of alcoholic drinks), and gambling, and Al Ansaab (stone altars for sacrifices to idols, etc.), and Al Azlaam (arrows for seeking luck or decision) are an abomination of Shaytaan’s (Satan’s) handiwork. So avoid (strictly all) that (abomination) in order that you may be successful.
Shaytaan (Satan) wants only to excite enmity and hatred between you with intoxicants (alcoholic drinks) and gambling, and hinder you from the remembrance of Allah and from As-Salaah (the prayer). So, will you not then abstain?
And obey Allah and the Messenger (Muhammad), and beware (of even coming near to drinking or gambling or Al Ansaab, or Al Azlaam) and fear Allah. Then if you turn away, you should know that it is Our Messenger’s duty to convey (the Message) in the clearest way” [al-Maa’idah 5:90-91].
This gambling – which is any transaction in which a person may win or lose, and he does not know whether he will be a winner or a loser – is all haraam. Indeed, it is one of the major sins, and its abhorrent nature is no secret when one realizes that Allah mentions it in conjunction with idol-worship, alcohol and azlaam (arrows for seeking luck or decision).
End quote from Fataawa Islamiyyah (4/441)
We have previously discussed in detail the wisdom behind the prohibition on gambling, in fatwa no. 4013
And Allah knows best.
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