Full Lecture Transcript (Cleaned)
The Question — 0:00
Is it permissible to participate in a competition with an entrance fee and a prize? Why is this not a form of gambling?
Pure Lottery — Unanimously Haram — 0:20
By unanimous consensus, any lottery system where you pay money for something valueless in order to have a chance at winning something valuable is haram. This is the raffle ticket scenario. Allah says in the Quran: "O you who believe, alcohol and gambling are filth from Shaytan" — and He mentions that gambling causes enmity and prevents one from remembering Allah.
When You Pay Nothing — Halal — 1:00
If you are not spending any money and you simply walk into a grocery store and are randomly selected as the 1000th customer to win a $100 gift card — this is not a lottery. You spent nothing. The store is giving a gift as advertisement. This is perfectly halal.
When You Buy a Product — Halal with Conditions — 1:30
What if you buy a product and it has a coupon or prize inside? A classic example: Tim Hortons in Canada had a "Roll Up the Rim" promotion where purchasing a coffee gave you a chance to win cars, houses, and other prizes. The price of the coffee did not change.
The majority of scholars say: if your genuine intention was to purchase the product for its own value — you wanted the coffee, the cereal box, whatever — and the prize comes as a secondary bonus, then it is permissible. Your goal was not to buy the coffee for the millionth chance at a prize. Two conditions: (1) your sincere niyyah must be to get the product itself, and (2) the price of the product should not be inflated for those who want to participate.
Competitions With Skill and Entry Fees — 3:00
This is the complex scenario. There is a hadith in Abu Dawud: "There should be no competition for money except in arrows, horses, and camels." By "money," scholars understood this to mean monetary prizes. The question is: what does this hadith imply for other competitions?
Why these three? Because arrows, horses, and camels are instruments of defense. Allowing monetary competitions in these areas encourages Muslims to train for protection of the ummah. The entire ummah benefits.
If money comes from a third party: A corporation, the masjid, or a donor provides the prize money, and participants compete for free — this is 100% halal by the majority. Any type of competition, in any field, is permitted when the prize comes from outside.
If participants pay entry fees: This is the controversy. The majority position, including the Hanafi school and others, says: if you are going to pay fees and compete, the competition must either fall into these three categories (defense-oriented), or the third-party money must be involved.
The evidence for the majority view is another hadith in Abu Dawud: the Prophet said that if two people are racing horses with their own money at stake, and a third horse enters the race without guaranteed winnings — the third horse being comparable in speed, not a lame old horse — then it is not gambling. This means: the moment there is someone who is not equally risking their own money, the gambling structure is broken.
The majority practical position: In Islamic competitions — Quran memorization, fiqh quizzes, essay contests — if the prize money comes from the masjid or a donor: completely halal. If participants pay entry fees and the prize comes from those fees: you need at least one or two participants who did not pay a fee and are equally qualified, for the competition to be permissible.
Ibn Taymiyya's position: He wrote extensively in Kitab al-Furusiyya that when there is maslaha for the ummah — a benefit to the ummah in the competition — it is allowed for everyone to pay fees because the goal is to incentivize and benefit the ummah overall. He and Ibn al-Qayyim held this view.
Practical Conclusion — 9:00
To get out of the khilaf and follow the safer opinion, always include one or two participants who do not pay the entry fee — perhaps selected by lottery. This way, all madhabs would agree it is permissible. If the structure does not allow this, Ibn Taymiyya's position that it is halal when the competition benefits the ummah is a strong and well-supported opinion. And Allah knows best.