Is It Permissible to Earn Money from Playing Games?
Question

There are games on the mobile phone through which you can earn money in dollars, and I play these games and transfer the money via my PayPal account. The games take some time for me to obtain money. What is the ruling on this money? Is there anything wrong with giving charity from it or buying food or anything else? Is it permissible or prohibited? Is there any verse in the Holy Quran which forbids that, or any hadith of the Prophet (blessings and peace of Allah be upon him)?
Praise be to Allah.The Islamic Stance on Prize Money in Competitions
It is not permissible to offer prizes for any kind of games or contests except in archery and racing on horses and camels, and anything that would come under the same heading as that of things that help in Jihad and supporting it.
The basic principle regarding that is the words of the Prophet (blessings and peace of Allah be upon him): “There should be no (money) prizes for competitions except in archery , camel-racing and horse-racing.” (Narrated by At-Tirmidhi, 1700 and Abu Dawud, 2574. Classed as authentic by Al-Albani.)
Some scholars added to that anything that helps in Jihad and supports it, such as competitions in memorising the Glorious Quran and the Prophetic Sunnah, and contests involving aeroplanes, ships, boats and the like.
Al-Khattabi (may Allah have mercy on him) said:
Giving prizes is not appropriate except in horse and camel races, and similar contests, and in archery contests. That is because these matters are preparation for fighting the enemy, and offering prizes for them encourages people to prepare for Jihad.
As for contests in matters that do not come under the heading of preparing for war or strengthening oneself for Jihad, accepting prize money for them is prohibited and is not permissible." (Ma`alim As-Sunan, 2/255)
The Prohibition of Gambling in All Forms
If the prize money comes from both competitors then it is gambling, which is prohibited.
If the prize money is given by a third person, or by one of them and not the other, then it is prohibited, even if it is not called gambling .
An-Nawawi (may Allah have mercy on him) said: Rather it is gambling if it is stipulated that money be paid by one of the two parties. But if one of them is offering to give money (to his opponent) if he is defeated, and will keep it if he defeats him, then it is not gambling, but it is an agreement to a contest that does not involve fighting skills, so it is not right." (Rawdat At-Talibin, 11/225)
Shaykh Al-Islam Ibn Taymiyah (may Allah have mercy on him) said: If one of the two players, or an outsider, gives the prize, it is forbidden nevertheless, except in the case of something that is beneficial such as races or archery, as it says in the Hadith: “There should be no (money) prizes for competitions except in archery, camel-racing and horse-racing ”, because spending money on things that are of no benefit in either religious or worldly terms is not allowed, even if it is not gambling." (Majmu` Al-Fatawa, 32/223)
Is It Permissible to Earn Money from Playing Games?
Thus it is clear that it is not permissible to offer money or to acquire it through playing games on the cell phone, whether all the players or only the loser pays that money, or it comes from a third party.
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And Allah knows best.