What kind of activities are fall under gambling? Why gambling is prohibited? 

Gambling is another fundamental prohibition in Islamic financial system. It’s also known as Maysir and Qimar in Arabic language. It applies to every activity in which a person wins or loses his property by a mere chance. In other words, it’s a game of pure chance where a person wins at the expense of the other. In gambling, the winner does not lawfully earn what he wins from his opponent and the loser loses his property without fair compensation. Gambling also includes betting on horseracing, soccer matches, and lotteries etc.

Prohibition of gambling in Quran and Hadith

There are various verses of the Quran and sayings (ahadith) of the Prophet Muhammad (peace be upon him) which clearly prohibit gambling. In the following, some of them presented in order to explain the severity of this sin.

God (Allah) says in Surah al-Maidah:

O you who believe! Wine, gambling, altars and divining arrows are filth, made up by Satan. Therefore, refrain from it, so that you may be successful” (5: 90). Satan wishes only to plant enmity and malice between you through wine and gambling, and to prevent you from the remembrance of Allah and from Salāh. Would you, then, abstain? (5: 91).

God says in Surah al-Baqarah:

They ask you about wine and gambling. Say, “In both there is great sin, and some benefits for people. And their sin is greater than their benefit.

The Prophet Muhammad ﷺ said:

“Whosoever says to his companion: 'Come let us play a game of chance or gamble', should give charity (as atonement)” (Sahih al-Bukhari and Muslim).

It can be understood from this hadith that even a mere invitation to gambling is such a serious sin that Prophet Muhammad ﷺ asked him to give charity as atonement. Then we can imagine the position of a person who involves in gambling.

Modern examples of gambling in financial transactions

If we look at the practices of conventional financial institutions and banks, we find the element of gambling in a number of products and financial transactions. For instance, conventional insurance is not permissible. Because, it has elements of riba (interest) and gambling (qimar). Likewise, public and private sector corporations sometimes mobilize their resources on the basis of lottery and draws which are also forms of gambling. Islamic financial institutions and Islamic banks must have to avoid from gambling-based products or transactions and provide Shariah-compliant alternatives to their clients.