Fatwa No : 82289
Ruling on Prize Bonds

Ruling on Prize Bonds

"What do the Islamic scholars say about this issue: is the prize won through prize bonds halal or haram? Explain in the light of the Qur'an and Sunnah.

الجوابُ حامِدا ًو مُصلیِّا ً

First of all, it should be clearly understood that in the prize bond scheme, there is no buying or selling of any item. Rather, the amount given under this scheme is, in fact, a loan to the government, and the profit given on it is considered interest (riba).
The full explanation of this system is as follows: the government does not enter into a direct agreement with each prize bond holder to pay interest on the loan they have given. However, collectively, it is understood with all those who purchase prize bonds that the government will distribute prizes among them. If it fails to do so, every prize bond holder has the right to demand the distribution of prizes — and they can even take legal action against the government to compel it to distribute the prizes.
Thus, the true nature of prize bonds becomes clear: That the money invested in prize bonds is effectively a loan to the government, without any fixed term, the investors may withdraw it whenever they wish.

let it be known that whatever the bond holders receive in the form of prizes is, in essence, a return on that loan, which is conditional and based on an agreement with all prize bond holders. And according to the Hadith and Islamic jurisprudence (Fiqh), every type of conditional profit on a loan is undoubtedly impermissible and constitutes interest (riba). Receiving and using such money is unlawful (haram) and must be avoided."

مأخَذُ الفَتوی

ففي الدر المختار: وفي الأشباه كل قرض جر نفعا حرام فكره للمرتهن سكنى المرهونة بإذن الراهن. (5/ 166)۔
وفي حاشية ابن عابدين: (قوله كل قرض جر نفعا حرام) أي إذا كان مشروطا كما علم مما نقله عن البحر، وعن الخلاصة وفي الذخيرة وإن لم يكن النفع مشروطا في القرض، فعلى قول الكرخي لا بأس به اھ (5/ 166)۔