Are medical services in Canada funded by casinos’ gambling income and interest earned?

Bismillahi Ta’ala

Walaikum Assalam Warahmatullah,

In order to address the claim provided, through academical reasoning, I think it would be beneficial to read through my previous answer (Nov 2020) about lottery fundings being utilized for hospital healthcare program. Let me reproduce that here.

Question:
Is it permissible for Muslims to utilize hospital treatments funded partly by private lottery proceeds, while patients themselves are not charged and covered through health insurance?

Answer:
Bismillahi Ta’ala
Walaikum Assalam Warahmatullah,

The question involves a couple of scenarios. Lets look at them systematically.

Scenario A:
The lottery proceeds are allocated to other avenues within the hospital, while government health insurance covers the costs of this project.
Ruling: In this case, taking benefit from the program would be permissible, since the treatment is covered entirely through insurance, without reliance on lottery funds.

Scenario B:
The hospital itself uses lottery proceeds to partially cover this project, while the remainder is covered by health insurance.

(i) If the patient is first charged and then reimbursed through a mix of health insurance and the hospital’s lottery proceeds:
Then this constitutes direct utilization of haram wealth and thus the ruling will be that of Impermissibility.

(ii) If the patient is not charged at all, and the hospital takes it upon itself to provide free services (arranged partly through lottery funds and partly through insurance):
Then two further distinctions must be made:

a. If the hospital directly designates the lottery funds to cover the patient’s treatment (and this known knowledge):
Then this is impermissible, since, as al-Shami relates that when the ‘ayn of haram wealth is known to pass directly from one hand to another, the prohibition remains attached to it. ( al-Durr Ma’ Hashiya 5:98)

b. If the hospital does not allocate lottery funds directly, but rather mixes them into its total pool of monies and provides welfare services out of its general budget:
Then this is permissible, since the benefit is received as tabarruʿ (a voluntary benevolence) from the hospital’s overall resources. The liability of ḥarām remains with the hospital, not with the Muslim patient.

A Brief explanation from fiqhi point of view:

The juristic principle al-haram la yata’adda dhimmatayn (“the unlawful does not transfer across two liabilities”) offers important guidance when considering how ḥarām wealth affects subsequent transactions and recipients. The underlying idea is that if unlawful wealth enters into the liability of one party, its sin remains with that party. When such wealth is then transformed into a service or absorbed into general resources, the liability does not necessarily cross over to those who merely benefit from it at a secondary level.

However, as al-Shami clarifies, this maxim applies only when the unlawful origin is unknown or indirect. If one directly witnesses or knows that a specific ʿayn (identified item or sum) of haram wealth is taken from one person and handed directly to another, then the prohibition remains attached to it. In such a case, the maxim cannot be used to exempt the second party.

Applied to the question of hospitals funded by lottery proceeds, the distinction is clear. If the hospital does not directly assign those proceeds to a Muslim’s treatment but instead merges them into its overall budget and provides services out of its general resources, then the benefit is permissible for the Muslim to accept. The hospital bears the liability of handling the haram, while the patient merely receives a welfare service, which in essence is a tabarruʿ (benevolence). Conversely, if it is known that the hospital directly designates lottery funds to cover a specific Muslim’s treatment, then the prohibition persists, since the unlawful wealth is passing knowingly from one hand to another.

A Vital Exception to above understanding:

The above reasoning applies primarily when dealing with non-Muslim entities that operate lotteries or similar mechanisms. In their case, the liability of haram rests with them, and the Muslim may permissibly benefit from services so long as the haram wealth is not directly designated to him.

Muslim institutions, however, stand on a different footing. Schools, masajid, hospitals, or organizations run by Muslims are bound by the Shari’ah not only in their end use of funds but also in their acquisition of funds. They cannot lawfully accept or utilize haram monies in the first place. For them, to take gambling proceeds and then redistribute them as free services is not exonerated by the maxim, because their very act of taking is an active taʿāwun ʿalā al-ithm (assistance in sin). The prohibition therefore remains in full force, and their subsequent services remain tainted by their initial wrongdoing.

This distinction explains why a Muslim may accept a free benefit from a non-Muslim public hospital or school that is indirectly supported by lottery revenues, but cannot accept the same from a Muslim institution that has compromised its financial integrity by knowingly taking funds from impermissible sources. The maxim protects the innocent recipient in the first case, but it cannot be invoked to justify the wrongdoing of a Muslim organization in the second.

And Allah Ta’ala Knows Best
Mufti Faisal al-Mahmudi

Having understood the principle and its application to the hospital scenario, let us apply the same to Canadian Government as well.

This claim conflates two very different matters:

Direct engagement in riba contracts:

When a Muslim takes out a mortgage, opens an interest-bearing account, or uses a credit card in an interest arrangement, they are entering into a ʿaqd ribawī (a ribā-based contract).

Here, the Muslim’s own dhimmah (liability) is tied directly to riba, through contracting, paying, or receiving it. This is explicitly haram by Qur’ān, Sunnah, and ijma.

Indirect exposure through government disbursements:

Taxes are collected into a central treasury (bayt al-māl of the state). The government then invests or allocates these funds, sometimes in impermissible ways (e.g., interest-bearing securities).

When benefits are distributed (child care, universal health care, social assistance), they are not earmarked as “ribā payouts” but rather as welfare allocations from the general pool of state resources.

Applying the same principle as before: the liability of investing in riba rests with the government’s dhimmah, not the Muslim recipient. By the time it reaches the citizen, it is received as a general entitlement or gift, not as an interest contract.

This can become more clear if we understand what “Tax” is as compared to “Investing in an interest bearing avenue by oneself”.

Taxes are not an investment by citizens in the government. They are a compulsory levy imposed by the state to fund its general operations and provide a baseline of public services. Unlike an investment, a taxpayer has no claim to profits, no shareholding in state assets, and no entitlement to the return of the specific funds contributed.

Thus, the funds collected as taxes enter the government’s bayt al-māl (public treasury), where they are treated as state property. The government then allocates or even invests these monies; sometimes in lawful means, sometimes in interest-bearing instruments. Whatever the case, the liability (dhimmah) of such use rests on the government itself, not on the individual taxpayer.

When the government disburses child-care allowances, healthcare, education, or other forms of welfare, these are not “returns” on a Tax Payer’s tax contribution. They are general entitlements extended equally to all citizens, irrespective of how much tax each has personally paid. In other words, the tax and the welfare benefit are disconnected transactions:

• Taxes are mandated contributions to the state.
• Benefits are public entitlements offered back to citizens as a function of residency or citizenship.

A simple litmus test makes this distinction clear:

If a taxpayer never utilizes any government benefits, such as healthcare, subsidies, or child allowances, then he has no legal right to demand his taxes back.

This demonstrates that taxes are not treated as an investment or deposit belonging to the taxpayer, but as general state revenue, redistributed at the state’s discretion.

All in all, as citizens who are Muslims, should not conflate our own actions which brings forth interest revenues or pay into interest bearing transactions with Tax system and Govt. usage of monies in interest bearing schemes.

And Allah Ta’āla Knows Best
Mufti Faisal al-Mahmudi