Tag Archives: prohibition

CEI Podcast for June 9, 2011: The Other Black Friday


Have a listen here.

The World Series of Poker is underway. The tournament is perfectly legal. And anyone over 18 can play poker in a casino. But it has been illegal to play the game online since April 15, now known to poker fans as Black Friday. Policy Analyst Michelle Minton goes over the controversy and explains why prohibition doesn’t work.


CEI Podcast – December 15, 2010: Alcohol Regulations Across the Country

Have a listen here.

Michelle Minton, CEI’s Director of Insurance Studies, takes a whirlwind tour of alcohol regulations across the country. From Pennsylvania to Texas to Colorado, there are regulations at every turn. They do everything from raise revenue to tell people what products they can buy at what times, to shelter politically favored companies from pesky competition. In this way, alcohol is like most other sectors of the economy.

New CEI Podcast – October 21, 2010: Relic of Prohibition

Have a listen here.

CEI Director of Insurance Studies Michelle Minton analyzes proposals to privatize Virginia’s liquor stores. Virginia is one of 18 states where the government holds a legal monopoly on the sale of spirits.

Fixing America’s Immigration Black Market

One of the problems with current immigration laws is that they raise the price of immigrating legally. Basic economics tells us that when something costs more, people consume less of it.

That’s why so many of America’s immigrants are turning to dangerous but cheap immigration black markets to enter the country. This is a problem with an obvious solution. In today’s American Spectator, Alex Nowrasteh and I make the case that lowering the cost of legal immigration through liberalization will reduce the amount of illegal immigration, and shrink cruel black markets.

Basic economics wins again.

Regulation of the Day 111: Buying Wine in New York

It is illegal for grocery stores to sell wine in the state of New York. Only liquor stores are allowed to sell the stuff.

This regulation, a relic of Prohibition, lives on because of one of the central concepts in public choice theory: diffused costs and concentrated benefits.

The benefits are concentrated in one constituency: liquor stores. Regulations give them get millions of dollars in free business. That means they have millions of reasons to lobby to keep the status quo.

Consumers, on the other hand, are hurt by the ban by the exact amount that liquor stores benefit. But that hurt is spread far and wide. No one consumer feels enough pain to hire a high-priced lobbyist to open up the market.

That means New York’s misguided restrictions on competition are likely to continue for some time. It’s hard to imagine an aggrieved shopper suing New York’s wine cartel because she has to make an extra trip to get the wine on her grocery list. Or because she pays a bit more than if she lived in a different state.

(Hat tip: Jonathan Moore)

Regulation of the Day 95: Buying Wine in Ohio

It is illegal to buy more than 288 bottles of wine per year in Ohio.

If you drink that much wine by yourself, then you have more important problems to worry about than regulatory compliance. But if you host of lot of parties or are building up a wine collection, you run a real risk of hitting the limit.

“The level was set to establish what would seem to be a reasonable amount for personal use,” according to the Ohio Wine Producers Association’s executive director, Donniella Winchell.

Since the law is somewhat difficult to enforce, no violators have yet been found. But when there are, the Ohio Department of Public Safety Investigative Unit will come knocking. Because while buying 288 bottles of wine is perfectly fine, buying 289 poses a threat to public safety.

(Hat tip to CEI colleague Megan McLaughlin)

Regulation of the Day 56: Kahlua in Ohio

Kahlua contains 20% alcohol in 49 states. But in Ohio, it is 21.5%. Weird, huh?

Turns out regulations are the reason. My friend Jacob Grier pointed me to an article showing that Ohio groups alcoholic beverages into two categories: wine/beer and spirits. Any beverage below 20% alcohol is in the wine/beer category and can be sold in grocery stores. Anything above 20% is classed as a spirit and can only be sold in state-run liquor stores.

Drinkers often mix Kahlua with spirits such as vodka. So the company actually changed its recipe in Ohio to ensure that Kahlua would appear in stores next to its complementary products. The benefit to consumers from this regulatory scheme is unclear.

Regulation of the Day 52: Bar Food

This one comes courtesy of Jacob Grier, blogger extraordinaire and former colleague.

In Arlington County, Virginia, there exist twelve restaurants that are required to sell $350 of food per gallon of liquor sold.

Isn’t that weird?

Stranger still, this gang of twelve voluntarily opted in to that bizarre requirement. They think it works better than what all other Arlington restaurateurs have to deal with – sales must be no less than 45% food, and no more than 55% liquor.

Again, what a strange regulation.

The reason for the switch from a dollar to a volume ratio is that Arlingtonians are developing a taste for more sophisticated – and more expensive – cocktails. Restaurants are finding themselves pushing up against that 55% barrier even without serving more drinks.

Jacob, who has thought about opening his own establishment, adds:

“this kind of regulation is one reason among many that I can’t imagine ever opening a bar in Virginia. It would be much smarter to eliminate ratios entirely and simply require that food is available to patrons who want it.”

Way to encourage entrepreneurship, Virginia.