During Prohibition - when the U.S. Congress outlawed the making, selling, transporting and consuming of alcoholic beverages - people in Atlantic City routinely disregarded the law. To use the words of U.S. Treasury agents, Nucky Johnson became "the virtual dictator" of Atlantic City because he protected those engaged in the business of (among other things) illegal, intoxicating liquor. And what a good business it was.
Although agents of the federal government tried to enforce Prohibition, people who wanted a glass (or more) of liquor routinely found ways to disregard the law. Atlantic City was in a prime location to receive alcoholic beverages which were shipped from Canada and Scotland.
Speedboats, known as rumrunners, met the cargo-laden ships offshore, then ferried the outlawed, offloaded liquor to places like Atlantic City. Nucky - the man who always wore a fresh, red carnation in his lapel - was at the hub of a lucrative, illegal transportation network. As Jonathan Van Meter tells us, in his book The Last Good Time:
Atlantic City had become the headquarters for the nation's most notorious rumrunners. Rum Row, some thirty miles offshore, supplied the entire country with its hard liquor . . . In and around Atlantic City, a fleet of trucks would pick up the liquor from wherever it came ashore and haul it to the distribution warehouses. (The Last Good Time, page 49.)
Later, after Prohibition was over and liquor was no longer illegal in America, U.S. Treasury agents learned that Atlantic City's activities weren't just protected by Nucky Johnson:
The Treasury agents quickly realized that local law enforcement "not only were well aware of these conditions but actively regulated, protected and at times even assisted these rackets" and that this fact was "well known" to the public, who "understood" that the racketeers were paying for protection.
People will sometimes do, in other words, what people want to do - even when the law requires otherwise. Nucky Johnson built an empire based on that fact. And ... as long as Prohibition was in force ... his wealth continued to grow.
Image - Impact of Prohibition
Text - Prohibition and the Volstead Act Become U.S. Law