While the rules in Dubai and Abu Dhabi have relaxed somewhat with alcohol served in some hotels and nightclubs.
People who consume or possess alcohol are required to have a Ministry of Interior liquor permit or they may face arrest, fines and possible imprisonment. Yes, alcohol is served in most major hotel bars, but technically that's only for guests of the hotel. People who consume alcohol in a hotel who aren't staying there are required to have their own personal liquor license.
Liquor licenses are only issued to people who possess current UAE residency permits and who are non-Muslim. The penalties for Muslims who are intoxicated are more severe and do include corporal punishment such as lashings.
However what may happen in Dubai isn't always applicable in other states in the UAE. It is strictly forbidden to consume or even carry alcohol in the dry state of Sharjah.
Just about any public activity that you can think of that involves alcohol is illegal. Drinking or being drunk in public is illegal, and believe it or not, the police are actually fairly good at spotting a drunk tourist and the defense of "But I've only had a few!" isn't considered a valid legal defense in the UAE and you may face immediate arrest and imprisonment simply for being drunk or drinking in public.
Driving with any amount of alcohol in your system is illegal and the penalties can be very draconian, so it really is something to avoid.
Travellers arrested for any form of alcohol related incident are typically jailed for many days while awaiting a court hearing. The penalties for any form of alcohol related offense tend to be quite severe and increase in severity where driving and injury are concerned. Penalties include lengthy imprisonment (think years not months), fines and for Muslim travellers, even those not from the UAE, lashings.
Note that the liquor licenses are Emirate specific, and a liquor license issued for Dubai only allows you to drink in Dubai. A separate liquor license is required for each Emirate.
You can buy at home or while traveling, and claim online from anywhere in the world. With 150+ adventure activities covered and 24/7 emergency assistance.
By international standards, including western first world standards, the UAE has a very low incidence of crime. However it still worth knowing what to look out for with this guide to crime in the UAE with World Nomads.
Use and possession of drugs are serious crimes in the UAE with very little leniency shown. Even prescription and over-the-counter medications could land you in trouble.