Dr. Monzer Kahf, a prominent economist and counsellor states: It is certainly Haram to issue lottery and to play it buy purchasing tickets. The charitable lottery, that some may think it as tolerable is in fact the specific kind that was common among the pagan Arabs at the time of the Prophet, pbuh, when the prohibition came down from God. charity has nothing to do with the prohibition. The prohibition focuses on the matter of principle: YOU CANNOT TRANSFER WEALTH FROM SOME PERSONS TO OTHERS (EVEN IF SOME OF IT IS USED FOR CHARITY AS AN ATTRACTION) BY SUCH REASONS AS A FLIP OF A COIN OR A RUN OF A NUMBER ROLLER.
What is prohibited is of course what makes such a transfer; this means when tickets are sold. But if a business promotion plan that give gifts to people use such method to distribute its gifts, that is permissible.
Money won in lottery, where there are tickets purchased by people, is Haram and must be given to Muslim charities for distribution to the poor and needy.”