The US crackdown on online gambling is a "new prohibition", which is likely to fuel a rise in fraud and exploitation, the UK culture secretary has said.
Offshore sites could become the "modern equivalent of speakeasies", illegal bars which opened in 1920s America when alcohol was banned, Tessa Jowell added.
New US laws forbid firms from taking internet bets, and ban banks and credit card firms from allowing web payments.
Under UK government plans, the Gambling Commission is to vet sites, giving official approval to those with the best working practices.
Operators will not be allowed to target children and must keep customers informed about how much money they have spent.
Key staff, such as managing directors and finance managers, will also be checked for links to organised crime.
Ms Jowell said: "Broadly speaking we have three choices: you can prohibit, like the US, do nothing or regulate, like we have.
"I firmly believe we have chosen the path that will do the most to protect children and vulnerable people and keep out crime."
She added: "America should have learnt the lessons of prohibition. The Volstead Act [which brought in prohibition in 1919] was meant to stop alcohol from causing harm, but in practice it forced otherwise law-abiding customers into the hands of the bootleggers.
"If it goes wrong, there is a real danger is that off shore sites based in poorly regulated countries will become the modern day equivalent of speakeasies, increasing the risk of exploitation and ....
Offshore sites could become the "modern equivalent of speakeasies", illegal bars which opened in 1920s America when alcohol was banned, Tessa Jowell added.
New US laws forbid firms from taking internet bets, and ban banks and credit card firms from allowing web payments.
Under UK government plans, the Gambling Commission is to vet sites, giving official approval to those with the best working practices.
Operators will not be allowed to target children and must keep customers informed about how much money they have spent.
Key staff, such as managing directors and finance managers, will also be checked for links to organised crime.
Ms Jowell said: "Broadly speaking we have three choices: you can prohibit, like the US, do nothing or regulate, like we have.
"I firmly believe we have chosen the path that will do the most to protect children and vulnerable people and keep out crime."
She added: "America should have learnt the lessons of prohibition. The Volstead Act [which brought in prohibition in 1919] was meant to stop alcohol from causing harm, but in practice it forced otherwise law-abiding customers into the hands of the bootleggers.
"If it goes wrong, there is a real danger is that off shore sites based in poorly regulated countries will become the modern day equivalent of speakeasies, increasing the risk of exploitation and ....
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