They further said: Moreover, if a third party offers a prize to only one of the two competitors on condition that he wins, while offering nothing to the other should he win, that arrangement is invalid because it is unjust. The latter will say, “If I finish first I receive nothing, whereas if my opponent finishes first he gets the prize.” Exactly the same inequity is present when the stake is furnished by only one of the two competitors, for the one who puts it up must say, “If I win, I collect nothing, but my counterpart(1), if he wins, takes it.” That weakens his resolve.
This is the basis on which some jurists of Madinah prohibited this scenario.
By contrast, when a third party pledges the prize to whichever of the two wins, the contestants are equal in effort and entitlement; hence the scholars have unanimously agreed on the permissibility of this form.
Once this is understood, the case is analogous to both contestants putting up the stake together. How, then, can providing the stake by only one of them be deemed preferable to providing it jointly?
Indeed, to forbid the stake coming from only one of them is nearer(2) to justice than to forbid it coming from both. Therefore, if you permit the stake when it is furnished by one of them, permitting it when it is furnished by both is even more rightful.
The crux of the matter is that when both contestants supply the stake it is closer to fairness, better fulfills the purpose of the contract, and makes each of them more willing and eager to win than when the stake is supplied by only one of them—and real-life experience confirms this.(3)