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Dealing in “Gambling-Free Lottery” is Prohibited

Answered as per Shafi'i Fiqh by Darul Iftaa Jordan
Could you please clarify the ruling on the study entitled,” Gambling Free Lottery : A New Islamic Lending Card”, which aims at the issuance of a new Islamic product called Islamic lending card or gambling free lottery where a person buys a lottery card and chooses a number, then sends that number to the institution in charge of such activity. The winner receives the sum as a goodwill loan free of interest. Upon the repayment of the loan, the company returns the price of the card to the buyers whose names are kept in its database .The institution sells the card in its regular price, but a commission is added to repay administrative costs, advertisement, printing, and staff salaries. The rest is dedicated to charity organizations and public interest i.e. the institution running this activity must be non-profit oriented. For example it is a government institution so as to guarantee the loan and repayment in case a loan borrower failed to pay ?

All praise is due to Allah, peace and blessings be upon the Messenger of Allah and upon all his family and companions: After careful examination of the so called” Gambling Free Lottery”, we realized the following: 1- Funds received from buyers of the card and then returned to them are classified in Islamic jurisprudence as a loan; the institution at this stage is the borrower, and the buyers are the lenders. Later on, the institution is the lender and the winning buyer is the borrower. Therefore, the loan in the first case is a profit to the lenders based on what is received by the winning buyer, so this fits the jurisprudential maxim which says that every loan that leads to a benefit is a usurious(Riba). 2- The commissions from which direct and indirect expenses are deducted, such as staff salaries and advertising, lead to returning the amount of the loan to the lenders, but this amount is less than that which has been originally paid, thus it is Riba . 3-The amount paid by the winner will not be given back to him, thus it becomes a price to the loan taking into consideration the fact that this amount covers the regular price of the card, direct and indirect expenses, thus it is a sort of Riba. Accordingly, it is prohibited to deal with "Gambling Free Lottery" because it involves Riba. And Allah knows best.

This answer was collected from the official government Iftaa Department of Jordan.

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