Booze, pot, and online gambling surge as lockdowns continue
Locked in and locked down, American consumers are turning more to their favorite “vices.”
With the initial surge of panic buying over, wine and marijuana sales are still way up, presenting an opportunity — and a challenge — for the businesses scrambling to meet the demand spikes and shifts in consumer behavior.
“It’s like New Year’s every day,” said Mark Schwartz, the owner of Little Mo Wine and Spirits in the Crown Heights neighborhood of Brooklyn, New York, who has seen alcohol sales shoot up fourfold. While he built his neighborhood shop on personal conversations and recommendations, almost overnight he has had to switch to delivery only, hiring more staff and drivers, and caught in an endless cycle of restocking.
Zoom happy hours and virtual cocktail parties are driving sales. Customers who used to come to the store a few times a month now get delivery three to four times a week, Schwartz said. But while he appreciates the ringing cash register and his hard-working, protective-gear wearing staff, he misses the human connection.
“I’ve become the last thing I wanted when I opened business,” he said. “Amazon.”
Adam Kahmann, a 37-year-old finance manager in Lexington, Kentucky, is normally a bourbon sipper, but he and his wife are using the quarantine time to try out some more creative cocktail recipes and explore wine varieties. They also help “police” each other to keep from overindulging, and stay on schedule.
“If I get a bottle out for a pour, and then I get up for another one, I kind of get an eye from her,” he said. “We’ve got ways to keep each other in a good state.”
Marijuana dispensaries and delivery services are also experiencing a coronavirus boom. On March 20, after Nevada reported its second death from coronavirus, the governor ordered all nonessential businesses closed and upgraded his request for shelter in place to a requirement. Dispensaries were ordered to switch to online only.
Business shot up almost 800 percent overnight at the state’s largest cannabis delivery service, Blackbird. Within the first few hours, the “Postmates” of pot found itself inundated with more orders than it could handle. Retail outlets closed their storefronts and switched to pick-and-pack crews working in the back.
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“People initially saw constraints on our ability to meet consumer demand and a reduction of the number of deliveries and ordered more product,” with average orders shooting up from $120 to almost $160, said founder Tim Conder. The company has increased headcount by 25 percent and is looking to scale responsibly.
“It’s an opportunity for us to capture short-term revenue. Long term it’s scary,” said Conder.
The company must walk a fine line between serving customers, and protecting front line drivers, using as much personal protective equipment as is available, coming into contact with an average of 50 customers per day.
Regulated marijuana delivery presents its own challenges compared. Delivery drivers, patients and customers must wear masks. ID is checked. A form is signed. Cash and product are exchanged by hand.
“When business is forced to expand in a short period of time it comes with a lot of unintended consequences. We’ve done our best to expand responsibly, for business and safety,” Conder said. “We have nothing to compare it to. I don’t think the world has anything to compare it to.”
Meanwhile, since sports betting has virtually dried up with all major sports canceled, online casino and table gaming have also seen a surge of new customers and old customers returning.
About the only action right now is table tennis. Leagues are trying to come up with different options, such as the recent NBA HORSE tournament. There’s also virtual horse racing. It’s just not the same.
But online slot machines are ringing and table games humming. Online poker revenues were up more than 100 percent from February, and iGaming revenue reached a new record of $64.8 million according to the figures released Wednesday for New Jersey, one of two states that allow online gambling.
“Just like food delivery companies, or just like Amazon or Netflix, because we are a stay-at-home activity, we are seeing the impact of people confined,” said Thomas Winter, SVP of operations for Golden Nugget casino, which has both a land-based casino in Atlantic City and an online gaming division.
Online poker is having a “renaissance” as players ante up more for tournaments and try to recreate their neighborhood poker nights, said Yaniv Sherman, head of commercial development for 888casino, an online gambling site.
After having experimented and abandoned video chat functions years ago, providers are looking to add back these social elements and add “play with friends” features as video chat becomes a new primary way of socializing.
Providers have seen a surge of new customers, and customers who used to play once every few months have steadily returned. But the overall player behavior hasn't changed, said Winter.
“They’re playing the same number of days per month, seven, at the same time of day, hour by hour,” he said.
But, as the saying goes, the dose makes the poison.
Gambling providers closely monitor customer player behavior and have various ways to alert players — pop up warnings, or an email or phone call — if they play for too long or with stakes that are too high. These mechanisms become even more important to monitor as national unemployment spikes, Sherman said.
At the same time, services for addictive behaviors have switched to online and phone calls, removing a key in-person support for the subset of customers with compulsion problems.
“Everyone is experiencing excessive stress. Stress has a tendency to shut down our executive reasoning and lets the evolutionary parts of the brain take over,” said Dr. Warren Bickell, Professor of Psychology, Neuroscience, and Health Sciences at Virginia Tech. “When you have a short-term perspective, the things that people value that are intense, brief, immediate and reliable they go after. It takes them out of the moment and it soothes them in some fashion.”
If consumers find they’re indulging too much and are unable to do work, it may be time to reach out to a loved one. If they detect it’s severe, they should seek additional help, Bickell said.
Providers are now “hoping to start talking about exit strategies” Sherman said. They’re discussing when that light at the end of the tunnel will arrive and what it will look like.
“I want it to end well,” said Schwartz, the wine store owner. “I’ve seen the movie where I’m punished for my avarice.”
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