Answered by Ustadha Maimoonah
Assalamu alaykum I want to ask about prize bonds is it Halal or Haram kindly explain. According to some scholars/ Mufti it is Permissible / Halal but I want to know this from you, whether it is really halal or not because according to them in this neither you’re scared of losing your own money of which you bought the bond (so its not in the mean of Jua) and also don’t know about the actual increased price you’re going to get through this bond so it’s also not sood, in sood you know the actual amount which is going to be increased so please you tell whether their statements are correct or not?
In Islaam, transactions are based on truth and justice to both the buyer and seller, all those that consist of injustice and hardship are disapproved of. Hence, gambling, interest, transactions based on uncertainty, chancing etc will all be impermissible in Islaam. These are schemes that are unjust and cause arguments between the two parties hence, they must be abstained from.
Prize bonds are a type of government run bond in which a bond is purchased and entered into monthly or weekly draws of winning cash prizes higher than the face value paid. The bonds of each individual are placed together and the ‘winner’ receives the joint amount, the amount the rest of the participants put down is returned to them. This resembles gambling and the amount added onto each investment will be interest.
One may argue that this is not interest as the exact same amount is returned to those that do not win. However, this is not correct, as when the winner is chosen, the amount returned to him is greater than what he initially paid. This is clear interest. (Fatawa Darul uloom Zakariyyah, page 459/460, zam zam publishers)
Furthermore, such a scheme is based on gambling as the money gathered is distributed at random, some may receive more than others and the intention of participating in such is that their amount is increased
Allah Ta’ala says in the Qur’aan:
يَـٰٓأَيُّہَا ٱلَّذِينَ ءَامَنُوٓاْ إِنَّمَا ٱلۡخَمۡرُ وَٱلۡمَيۡسِرُ وَٱلۡأَنصَابُ وَٱلۡأَزۡلَـٰمُ رِجۡسٌ۬ مِّنۡ عَمَلِ ٱلشَّيۡطَـٰنِ فَٱجۡتَنِبُوهُ لَعَلَّكُمۡ تُفۡلِحُونَ
“Oh you who believe, indeed liquor, gambling, idols and arrows are filth, from the acts of Shaitaan, so abstain from them so that you may be successful”
Sayyidina Qatada has commentated regarding this verse that it was the habit of some Arabs that they would bet all their belongings, even family, and lose them, after which they would live a sorry life. (Ma’arfiul Qur’aan)
Gambling is forbidden in Islaam based on the fact it leaves one negligent of the remembrance of Allah Ta’ala and unmindful of religious obligations, moreover, such wealth has been acquired that he is not worthy of. Hence, attaining wealth in this manner must be abstained from.
Only Allah knows best
Written by Ustadha Maimoonah
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham