The first form of gambling is when no party is obliged to pay any amount for certain; rather, the payment of each party is dependent upon a uncertain event in the future. In this case, the gambler does not stake his money initially, rather the money is put at stake by promising to pay later.

For example, A and B compete in a race, with the promise of the loser paying the winner 100. In this example, there is no certainty of payment from any one party; rather the payment is contingent from both sides on winning and losing. Also included in this category is the betting that takes place in horse-racing and various other sports. For example, A says to B that if team X wins the match, I will pay you 100, but if team X loses, you will have to pay me 100. This will be gambling, hence unlawful. It is for this reason, Sayyiduna Ali (may Allah be pleased with him) said: Chess is the gambling of non-Arabs. (al-Bayhaqi in his Shuab al-Iman) However, it should be noted here that in order for this type of betting to be considered gambling, there should be a two-way bet. If a one-way bet is made, it will not be considered gambling, hence lawful. For example, A says to B that if team X wins, I will pay you 100, but if team X loses, you don't pay me anything. This is a one-way bet and not considered by the jurists (fuqaha) to be gambling. The reason being is that in order for a transaction of gambling to transpire, the wealth of both parties should be at stake. A one-way bet is akin to one making a vow of paying someone money if such and such thing occurs. (See: Radd al-Muhtar, 6/403)

Also, if a third person not taking part in the sport vows to give the winner a prize, then this is also permitted and not considered to be gambling, provided the participants do not have to pay anything to enrol into the competition.

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Gambling : 2nd Form.