There is nothing authentic from the Prophet صلى الله عليه وسلم regarding playing chess. However, the narration on Ibn Umar, may Allaah be pleased with him, that he said it is worse than dice is authentically established to him as been reported in the book Sunan al-Kubraa for al-Bayhaqi (10/ 212). As for the narration on Ali bin Abi Taalib, may Allaah be pleased with him, that he came across some people playing chess and he said to them:
مَا هَٰذِهِ التَّمَاثِيلُ الَّتِي أَنْتُمْ لَهَا عَاكِفُونَ
What are these images, to which you are devoted?
Or in another narration that he said: it is a form of gambling, then both narrations to Ali bin Abi Taalib رضي الله عنه aren’t authentic to him as been mentioned by Shaykh Albany rahimahullah and others.
Concerning the ruling on playing chess, then the majority of the scholars deem it impermissible and other scholars consider it to be makruh.
The opinion of the Lajnah Daa’imah: [reference not available anymore]
Shaykh Albany rahimahullah was on the opinion it was permissible to play upon certain conditions and from those conditions he rahimahullah mentioned is that the heads for the chess images be removed. It’s not clear if the game could still be played without the heads being identified. In all cases, one should preserve his time with that which is more beneficial In Shaa Allaah.
AbdulFattaah Bin Uthman