How is buying and keeping prize bonds in Shariah terms? And what is the ruling on participating in the prize schemes of mobile apps and shops nowadays — for example, coupons and draws on purchase, spin wheel in exchange for points, and offers of large prizes on purchase of a specified amount?

A prize bond is in reality a loan given to the state, with which the condition of a prize through a draw is attached. Two fundamental defects are combined in it:

• Interest (riba): Any kind of stipulated profit on a loan is interest. Allah Almighty says: ﴿وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا﴾ (Allah has permitted trade and has forbidden riba) (Surah al-Baqarah: 275). The Islamic Fiqh Academy (Jeddah), in its Resolution No. 62 (6/11), held in 1410 AH, declared all types of bonds to be interest-based loans and clarified regarding prize bonds that these are loans in which profit has been stipulated for all or some of the lenders, and along with it there is also resemblance to gambling; therefore issuing them, buying them and keeping them is haram.
• Gambling (maysir): From the combined interest profit formed from the wealth of all bond holders, a few individuals receive a prize and the rest remain deprived; one person's share is transferred to another without a Shar'i counter-value. Allah Almighty declared maysir to be a Satanic act and commanded avoiding it: ﴿إِنَّمَا الْخَمْرُ وَالْمَيْسِرُ وَالْأَنْصَابُ وَالْأَزْلَامُ رِجْسٌ مِنْ عَمَلِ الشَّيْطَانِ فَاجْتَنِبُوهُ لَعَلَّكُمْ تُفْلِحُونَ﴾ (Wine, gambling, stone altars and divining arrows are only defilement from the work of Satan, so avoid it so that you may succeed) (Surah al-Ma'idah: 90). This is why the Permanent Committee has also declared prize forms linked to a loan to be maysir and a major sin.

Therefore buying prize bonds, keeping them and taking their prize is not permissible. Whoever already has them should withdraw the principal amount and exit from it, and if a prize has already been received, he should give it in charity to the poor instead of bringing it into personal use, because this is the Shar'i way the scholars have stated for disposing of wealth obtained by a haram method.

There are three forms of them:

(a) Paying to enter: If money has to be paid to be included in a draw or spin — whether it is deduction of mobile balance, an expensive SMS, buying coins inside the app, or an entry fee — then this is pure gambling and is haram; because a person stakes wealth and either loses everything or obtains the wealth of others. The Prophet, peace and blessings be upon him, said: "Whoever plays nardashir (backgammon/dice) it is as if he dipped his hand in the flesh and blood of a pig" (Sahih Muslim: 2260).

(b) Draw conditional on purchase: Regarding this, contemporary scholars have two positions. According to the Permanent Committee and Shaykh Ibn Baz, may Allah have mercy on him, this is not permissible, because it contains maysir and gharar; a person buys out of greed for the prize instead of for the actual purchase, and this is a form of consuming people's wealth by false means (Fatawa al-Lajnah ad-Da'imah: 15/191, 15/195; and Resolution No. 162 of the Council of Senior Scholars is also to this effect). Shaykh Ibn 'Uthaymin, may Allah have mercy on him, allowed scope with two strict conditions: first, that the price of goods has not been increased because of the prize; second, that the buyer is in reality buying a thing of his need, not buying merely for the sake of the prize. In our view the preponderant and more cautious position is that of the Permanent Committee; and where greed for a prize is induced by increasing the price or by causing unnecessary purchase, the prohibition is absolutely clear there, because there the buyer either suffers loss or obtains a chance profit — this is the reality of gambling.

(c) Completely free entry: A scheme in which neither purchase is a condition nor any payment, and participation is merely free, one's own wealth is not staked in it, therefore the form of gambling does not arise; nevertheless wasting time in such a greed-filled atmosphere and running after it is not befitting a Muslim.

Maqasid-based caution: The Shariah has placed the protection of wealth among its fundamental objectives and has linked earning wealth to labour, trade and lawful means. Gambling overturns this very system: it hands wealth over to chance and creates greed, regret and mutual enmity in hearts — these are the very corruptions to which verse 91 of Surah al-Ma'idah has pointed.

Translated from the original Urdu fatwa.