After the remarkable 2-3 result in the Man United v Middlesbrough game last night, the bookies must be in esctasy. With most people betting on Man United to win, the result will be quite a welcome on.
But it got me thinking: Gambling is haram in Islam. But is betting on a sports team to win always "gambling"?
Let me put it to you this way: Is investing in the performance of a sports team gambling? Is it any different from investing in the performance of a company on the stock market?
Islam has no qualms with Muslims investing in the stock market, or various other risk-taking activities such as opening a business eventhough the outcome is never certain and dependent on so many other factors that can neither be anticipated or planned for. The difference, i've been told by my learned friends, is that investing in the stock market requires research, hard work and skill; the element of speculation is reduced dramatically. It isn't a game of chance therefore it isn't gambling therefore it is permissible in Islam (as long as you invest in halal companies producing or providing halal products and services).
"Research, hard work, and skill" -- a smart investor does this. What about a stupid one who knows nothing about the stock market or the industry he's investing in? For him, the stupid investor, the stock market is an incredible game of chance - investing your money in a company just because everyone else does, or just because you think the dot-com is HOT: that's pure speculation. Does that make the stock market haram for a stupid investor who doesn't put in the hard work to know which are the proper stocks to invest in? Presumably not, not at all. The stock market is still considered halal (for the stupid or smart) eventhough speculation and events beyond anticipation or planning (such as war or natural disasters) can have a very strong impact on the market.
Read the following for an explanation why the stock market is halal, complete with dalil to support its argument.
Intelligent betting on a sports team also requires a lot of research and hard work. You've got to know who is playing and who is not, who is injured and who isn't, who the managers are and what their track record has been against the opposing team, what the weather conditions are like, who the referee is, is it a home or away game, are the strikers in form or not -- the list of variables to check is virtually endless. But for those who take the time to analyze them all, they can probably make an informed decision about who is most likely to win the match. That's exactly what professional gamblers do. The spend ALL their time analyzing every variable possible before they make their bet.
All the research an investor does in the stock market and particular stocks only tells the investor which stock is most likely to improve over the course of time. If betting on a sports team is haram, then the stock market should be too.
Read this for the opposing perspective by Shehzad Saleem.
As a disclaimer, i don't bet on sports results but i do invest in unit trusts. I also don't suggest through this article that betting is alright or halal nor am i encouraging anyone to run to their bookie to place a bet. I'm just looking at why betting on sports is haram while playing the stockmarket is halal.
UPDATE: Some have argued that when you invest in a company, you actually own a piece of the company, while with betting you own nothing at all except a chance to multiply your stake. My answer to that argument is, though you own a piece of the company through the virtue of your stock investment, what is the value of that ownership? If the company tanks and goes belly up, whatever value you had becomes nil, sometimes overnight (case in point: Enron). Therefore its as though you've owned nothing at all. So once again, the difference is simply semantic, because in principle, ownership is an illusion.
