The Question of Regulating Illegal Markets The gambling and cannabis markets in the Netherlands

Abstract

Decriminalizing and regulating an illegal market may
be a useful strategy for reducing crime. It is also necessary,
however, to have a clear understanding of the nature of the illegal
market before undertaking such an endeavor. Experiences in the
Netherlands show that regulation of formerly illegal markets may
indeed result in a substantial reduction of organized crime and
other criminal activities, if the regulatory system is designed
adequately. These experiences also show that such systems
inherently lack flexibility and that criminals are usually quick to
re-enter the market when unforeseen developments, particularly
technical innovations and internationalization, create new illegal
business opportunities.