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I think that it's more complicated than that.
Okay, so there's regulation. Who bears the cost of compliance? What happens when a sex worker is out of compliance with safety regulations, e.g., they are infected with HIV and aren't informing clients or using barriers? How do you handle that?
Keep in mind that a lot of people turn to sex work on an irregular basis, to pay for rent, drugs, or similar; very few of them are going to willingly go through any kind of licensing process, and most will lack the ability to pay for a license.
Yeah you can’t really require a license to do something like that, it is impossible to enforce. What you can do is offer safety systems. Free protection, free testing, safe harbor when needed, a safe space to work. People want to be safe, if you make it free and easy they’ll use those services and our societal cost goes down.