Horse racing is permissible, and there is nothing wrong with it, but the matter relates to taking compensation for the win.
Taking compensation occurs in several cases:
The compensation is provided by a third party who says: "Whoever wins, I will give him such and such." This is permissible.
One of the competitors says to the other: "If you beat me, I will give you such and such, and if I beat you, I will take nothing from you." This is also permissible.
The compensation is provided by both sides, which is a wager (rihan). The majority of jurists consider it prohibited because it is a form of gambling (qimar). This is when one says to his companion: "If you beat me, I give you such and such, and if I beat you, you give me such and such." The majority of jurists hold it as prohibited, and this is the correct view.
The evidence for this is that the Messenger of Allah (saw) conditioned the validity of a wager between two competitors on the inclusion of a third party (muhallil) with them. This third party pays nothing to the one who beats him, but he takes the prize if he wins and does not give anything if he is beaten, on the condition that his horse is equal to their horses. His horse must not be weak and slow while their horses are thoroughbreds; in such a case, it is known that they will outpace him, and his presence or absence would be the same.
The Messenger of Allah (saw) applied the term gambling (qimar) to competitors where compensation is paid from one to another if the horse of the muhallil is weak and it is certain that they will outpace him. By greater reason, it is gambling if there is no one else with them in the race. Therefore, a wager on a horse race where the winner takes from his companion is qimar and is haram.
The Hadith: Abu Dawood narrated via Abu Hurairah that the Prophet (saw) said:
مَنْ أَدْخَلَ فَرَسًا بَيْنَ فَرَسَيْنِ وَهُوَ لَا يُؤْمَنُ أَنْ يُسْبَقَ، فَلَيْسَ بِقِمَارٍ، وَمَنْ أَدْخَلَ فَرَسًا بَيْنَ فَرَسَيْنِ وَقَدْ أَمِنَ أَنْ يُسْبَقَ فَهُوَ قِمَارٌ
"Whoever enters a horse between two other horses while he is not certain that he will be outpaced, it is not gambling; but whoever enters a horse between two other horses while he is certain that he will be outpaced, then it is gambling." (Reported by Abu Dawood)
This is because if he is certain they will outpace him—due to the weakness of his horse—it is as if the race is only between the two of them, and his presence or absence is the same; thus it was gambling and is haram.
For information, there are jurists like Ibn al-Qayyim who permitted betting between two parties because he considered the mentioned Hadith weak. However, the Hadith has been described as mursal, and the majority of jurists have acted upon it; therefore, it is suitable for the derivation of evidence.
Accordingly, what we mentioned in The Economic System is the correct and adopted view for us: that a wager in horse racing is gambling.
15/02/2004 CE