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The global sex panic around sex work and trafficking has fostered prostitution law reform worldwide. While the normative status of sex work remains deeply contested, abolitionists and sex work advocates alike display an unwavering faith in the power of criminal law; for abolitionists, strictly enforced criminal laws can eliminate sex markets, whereas for sex work advocates, decriminalization can empower sex workers. I problematize both narratives by delineating the political economy and legal ethnography of Sonagachi, one of India's largest red-light areas. I show how within Sonagachi there exist highly internally differentiated groups of stakeholders, including sex workers, who, variously endowed by a plural rule network—consisting of formal legal rules, informal social norms, and market structures—routinely enter into bargains in the shadow of the criminal law whose outcomes cannot be determined a priori. I highlight the complex relationship between criminal law and sex markets by analyzing the distributional effects of criminalizing customers on Sonagachi's sex industry.