Prohibition going through the same illogical cycle
It is said that one of the greatest forms of stupidity is continuing to do the same thing
and expecting different results. It was the case with prohibition early in the 20th century and the same mistakes
are being made again currently with online gambling.
Prohibition was basically a ban on the manufacturing and selling of all forms of alcohol
between 1920 and 1933. There was the naïve misconception that if this was done, that there would be a definite
decline in crime, lawlessness and all of the resulting bad and immoral behaviour. This view was however the view of
a few about a few.
When it comes to alcohol use the vast majority of people who consume alcohol do so in
moderation, with the minority abusing it. That was the case during and before prohibition and it is still the case
now. The decision was however made by the US government to stop any use of alcohol.
What happened was however not the desired outcome. They killed a large section of the
economy with wine, beer and other huge liquor manufactures going out of business. The manufacturing and sale of
alcohol moved underground and a whole new breed of criminals started popping up. There was less work, still almost
the same amount of alcohol use and countless dollars going into trying to police the situation.
What was hurting the government however was that they weren’t earning any taxes from this
huge industry, but only throwing money at it through trying to police it. Something that went hand in hand with
Prohibition was the Great Depression. Although the Great Depression hit worldwide, it originated in the
It is ridiculous to imply that the Great Depression was caused by Prohibition, but there is
merit in that it could very well have been one of the contributing factors.
So we fast forward to the 21st century…
In the early 1990’s the internet started gaining momentum and one of the largest online
industries was created: online gambling. The first gambling sites started operating back in 1994 with licences from
some of the Caribbean islands. It soon became an exceptionally popular pass time and was enjoyed by millions
The largest number of people who played online was from the US. People had the option to
play all the games they liked without having to leave their homes, which meant no traveling time and much more
convenience. Globally the industry is estimated to have generated revenues of $21 billion in 2008.
The US government however decided to clamp down on the industry in 2002. They made it
illegal to transact with any form of gaming site. The results are so similar to what happened during the
Prohibition, it can only put a smile on your face.
More and more sites were starting to offering ways to get around the laws and started
operating in “creative” ways. The government put a lot of money into trying to police the industry, while gaining
absolutely nothing from the industry. Around 2007 the Great Recession started, which is also believed to have
started in the US.
The interesting coincidence is that a huge growing industry was being targeted again and
outlawed. One that millions enjoyed worldwide and a large number of these people are from the US. Could it not have
made more sense to take the industry and regulate it rather than going for Prohibition v2.0?
If the industry was regulated and licensing was allowed throughout the US, the taxes alone
could have been a tremendous boost to government coffers. In the UK online gambling companies have to pay nearly
half of their profits in taxes in order for them to operate over there, but they do it as it is still worth their
Once again it would be a bit of a stretch to try and attribute the woes of the Great
Recession to a clamp down on the gambling industry. However a huge industry like it could definitely have helped in
such a desperate time. It would have generated revenue for the government, created jobs and freed up time for the
police to focus on much more important work.