March 18, 2025
By Charles Fain Lehman
It is reassuring to see Rachel Lu diagnose the same problems I do in the new sports-gambling market, and offer the same prescription: prohibition. She is one of the steadily growing group of Americans waking up to the problems that legalization brought with it. And her recognition that banning gambling is a more elegant and more functional solution than regulation puts her well ahead of those now attempting to apply band-aids to a limb in need of amputation.
Where she falls short, however, is failing to generalize this insight to other “sin markets.” Neither alcohol prohibition nor the War on Drugs, Lu writes, were “particularly successful, and both had serious negative ramifications, fueling both black markets and aggressive policing.” And she takes pains to distinguish the virtues of re-banning sports gambling from the errors of banning other vices—alcohol, but also by implication everything from marijuana to fentanyl.
In fact, prohibition has proved time and again to be more effective than regulation at accomplishing the goal of suppressing vice markets. The constraint on restoring, for example, alcohol prohibition is not efficacy but political will—most Americans like alcohol and, in our democratic society, that means they should get to have it. But we should not throw the policy baby out with the values bathwater. Prohibition works, and it’s worth defending it wholesale—particularly because the arguments against it apply equally well to fentanyl as they do to more acceptable vices.
To claim that prohibition “works” may shock many readers. But the theory is simple enough. Free markets are highly efficient at providing high-quality goods at low cost to the consumer. This is why, for example, Americans enjoy top-notch produce at dirt cheap prices: a variety of producers compete effectively on quality and cost, with only limited safety regulation constraining them.
In the abstract, what is true of potatoes ought to be true of other commodities—including vice goods like alcohol, marijuana, or tobacco. It is not, logistically speaking, complicated to farm coca or opium, and they don’t call it “weed” because it’s hard to grow. lab-synthesized drugs, which have recently come to dominate the illicit market, are even simpler.
Nonetheless, these drugs have for decades been much more expensive and harder to come by than potatoes. Why?
The answer, put simply, is prohibition. After all, prohibition is just an extreme form of regulation. And regulation imposes constraints on the market, reducing the equilibrium quantity provided and increasing the price at which that quantity is sold.
The drug-policy researcher Jonathan Caulkins offers an illustrative example. At the farm gate in Colombia, a gram of cocaine costs about the same as a pound of coffee (roughly $3 as of 2014). By the time the two habit-forming substances hit the street, though, their prices have diverged. A retail “dose” of coffee costs a few dollars, or cents if you brew your own, while a dose of cocaine can cost tens or hundreds of dollars. The difference: the cocaine encounters all sorts of regulatory constraints on its way to the end consumer, constraints which get internalized as higher prices and lower availability.
Lu intuits this argument when it comes to sports gambling. In the absence of a legal market, sports gambling services will be provided, but by offshore companies hampered by regulation, or by bookies who can never grow their pool too big. Under legalization, large, efficient companies can bring the full power of capitalist innovation to bear on making their products as addictive as possible.
But as it is with sports gambling, so it is with other products. This is why, for example, the potency of marijuana has risen with legalization, while prices have declined. Companies like Trulieve are just better at selling pot than are black-market operators. And the model obtains for hypothetical legalizations: if you think the fentanyl crisis is bad now, imagine what it would be like if Amazon and Wal-Mart were allowed to sell it.
Don’t prior prohibitions give the lie to this model? Not really. Alcohol prohibition reduced cirrhosis of the liver—a reliable proxy for problematic drinking—by 10 to 20 percent; proportional reductions in adverse health effects are plausible. Claims that it increased violence are largely based on soaring homicide rates in the era, which were likely contaminated by the emerging popularity of automobiles (vehicular homicide then not being separated). State-level prohibitions leading up to the 18th amendment have been found to have reduced homicide rates, consistent with evidence from India and South Africa that alcohol prohibition reduces crime.
What about the War on Drugs? Though the details deserve more space than can be given here, it is far from clear it was the unmitigated failure Lu assumes. Rates of drug use among adolescents and adults fell steadily through the 1980s. And while the War on Drugs did entail rapid growth in the U.S. prison population, only a small fraction of those incarcerated were “unambiguously low-level” offenders. Most had prior records or were violent offenders—suggesting that the Drug War contributed to the historic crime decline of the 1990s.
The reader need not be convinced by these examples to recognize that even if prohibition is imperfect, so too is a regime of a legal, “regulated” market in vice. Illegal drugs now kill just south of 100,000 people per year—making them less deadly than legal and regulated alcohol (over 178,000 deaths) or tobacco (nearly half a million). “We tend to think,” Lu writes, that prohibition “simply doesn’t work now.” Perhaps, but “legalize, regulate, and tax” doesn’t work either.
Many readers will now, of course, be asking whether I am calling for the repeal of the 21st Amendment (this being the typical gotcha of those who have not thought about the issue for longer than a dorm-room smoke session). I am not. But the case against alcohol prohibition is a democratic one, not a practical one. Most Americans drink, and even those who don’t think it’s morally acceptable. Alcohol does a great deal of harm, but we as a society have decided to tolerate those harms in the name of our enjoyment.
But the fact that we have made that decision is not a persuasive case against prohibition’s efficacy. Nor do we need to generalize from one vice to the other. Indeed, our willingness to live with one harmful, addictive substance is all the more reason to be wary of adding more to our collective buffet of vice. Lu is right to think that in the case of sports gambling, the pleasure juice is not worth the social-cost squeeze. I would simply extend that reasoning to many other vices, from fentanyl to cocaine to marijuana.
And it is because of these substances, and other besides, that the foregoing brief for prohibition matters. After all, the assertion that prohibition “doesn’t work” is a concession to those who would see it done away with—not merely for alcohol or tobacco, but for the scarier drugs too. After all, we are still barely a century from the effective banning of heroin, and only 50-odd years from establishment of the modern system of controlled substances. And the past two decades have seen the state-legalization not just of sports gambling, but of marijuana and psychedelics too. Checking the impulse to go back to the old way of doing things is a constant necessity.
This is particularly so in what Lu rightly identifies as the age of “sin markets.” Because capital is more powerful than ever, and culture more accommodating than ever, vice is more readily available, in more potent forms, than ever before. We can attempt to reason with it or bargain with it. But usually, it’s better to just say no.
Charles Fain Lehman is a fellow at the Manhattan Institute and senior editor of City Journal.