In game terms, the evil eye is not magical per se, though magic can sometimes invoke or prevent it. Rather the evil eye is a common, ordinary part of life in a world where genies run rampant and elemental spirits continually seek to cause trouble.
The following rule is designed to reflect the danger of being less than humble in an Arabian setting. If player characters are praised and fail to respond with humility and modesty, they must make a DC 15 Wisdom check. A character who fails has made a genie jealous, and becomes afflicted with the evil eye.
Neither Fate nor Fortune can be said to smile upon characters afflicted with the evil eye. They become hapless and unlucky. All saving throws suffer a -2 penalty, as do all skill and ability checks. New encounters are indifferent at best, never friendly. Strangers can sense that something is wrong with the “sufferers,” but rather than sympathy, they feel distrust. Local governments view anyone afflicted with the evil eye as shifty; a sufferer’s business may be audited for fraud. Local clergymen view sufferers as potentially dangerous, and may search their belongings or even refuse to offer hospitality.
A character afflicted with the evil eye only can be cured by Remove Curse or Quest. The avert evil eye spell can protect a character from this plight (even a pompous braggart), but the spell is of no help after the fact.