I visited Eureka Springs in Arkansas a couple of years back. There wasn't a specific festival on, I had just missed a blues festival, but the whole town was full of buskers and places where there was music going on. There didn't seem to be any problem with Alcohol as there were hotels and bars serving both alcohol and entertainment. Surprised me a little because other places I visited in Arkansas (Mountain View for instance) were completely dry! Must say it was a quirky little town - very 'Old World' by US standards and it seemed more 'European' than a lot of places I visited.

The other thing I noticed was that we visited a couple of farmers markets in Edwardsville, Illinois and Alton, Missouri. There were bands performing in the open at the markets but there were also bars in both places where the musicians seemed to congregate and play. In some ways they were very much more like the UK festivals I am used to than the US ones mentioned earlier.

Maybe it helped that I was being shown round by someone who is not a 'folky' and had no pre-conceptions about folk music?

Cheers

DtG