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SINGAPORE: Thailand and Cambodia escalated their ongoing border spat on Thursday (Jul 24), with troops exchanging fire, fighter jets deployed and reports of civilian casualties emerging.

But where once the close personal ties between their leaders could have been counted on to help defuse the situation, it is that same relationship that makes matters worse today.

Prime Minister Hun Manet said on Facebook that Cambodia had “no choice but to respond with armed forces against armed aggression”. Suspended Thai Prime Minister Paetongtarn Shinawatra wrote on Instagram subsequently that his father, Cambodian Senate President and former leader Hun Sen, was “acting like a victim”.

There has been a stunning and barely believable falling-out between two highly influential political dynasties in Southeast Asia, since Jun 15 when Mr Hun Sen leaked a phone conversation with Ms Paetongtarn that eventually led to her suspension.

Once seemingly the best of comrades, Mr Hun Sen has since had only sharp words and accusations for former Thai prime minister Thaksin Shinawatra, who is Ms Paetongtarn’s father, even calling him “immoral”. The Hun family had long embraced the Shinawatra clan, providing a place of refuge during Mr Thaksin’s self-imposed exile from Thailand for 15 years.

On the surface, wounded pride appears to be the most proximate reason for Mr Hun Sen turning his back on the Shinawatras. However, there are reasons to believe that there are larger factors at play in the background.

A HIGH-STAKES GAME

The first is that, up until recently, Mr Thaksin’s Pheu Thai party had been pushing strongly to legalise casinos.

It is no secret that Thais constitute a key group of customers and source of labour for Cambodia’s many casinos, especially those along their shared land border. According to Thai media reports in June, several Cambodian casinos that relied on cross-border travel were forced to close temporarily due to border restrictions.

The Shinawatras’ fervent push for casino legalisation would therefore dent demand for Cambodian casinos and consequently, negatively impact the Cambodian economy. The Cambodian gambling sector provided over US$63.1 million in casino tax revenue to the government in 2024.

Although the Thai government has since dropped the legislative Bill – mainly to avoid a potential no-confidence vote against Ms Paetongtarn – the proposal has likely caused considerable concern in Phnom Penh. Pheu Thai is almost certain to revive the legalisation effort as and when political conditions improve.

FROM CRACKDOWN TO BREAKDOWN?

Self-exiled Cambodian opposition figure Sam Rainsy has offered a related theory: that Hun Sen’s financial interests are being threatened by Thailand’s ongoing crackdown on scam centres based in these casinos on the Cambodian side of the border. He claims that criminal syndicates operating these scam centres are a source of illicit revenue for the Cambodian government and also for Mr Hun Sen and his ruling Cambodian People’s Party (CPP).

Mr Rainsy’s allegations might be dismissed as politically motivated, and are often treated as such by the CPP.

But it is arguably harder to do so amid considerable reporting about the proliferation of scam centres in Cambodia. There are also longstanding allegations about the roles played by influential Cambodian businesspeople in the gambling sector, Chinese organised crime in places like Sihanoukville, and political elites in Phnom Penh.

In particular, the United Nations Office on Drugs and Crime (UNODC) published an in-depth report in April on scam centres in Southeast Asia, highlighting the presence of known or reported cyberfraud compounds in Cambodia, including the city of Poipet, which lies along the Thai-Cambodian border. Thailand’s Centre for Gambling Problem Studies also recently alleged close ties between Cambodia’s border casinos and political elites.

In mid-July, Thai authorities raided a residence believed to belong to Cambodian senator and tycoon Kok An, in relation to his alleged involvement in scam operations targeting Thai citizens. He owns the Crown Casino Resort in Poipet, and is also known for his close ties to Hun Sen. There are arrest warrants for Kok An and his children on the charge of involvement in transnational crime.

Another Cambodian tycoon, sitting senator Ly Yong Phat, is now under Thai scrutiny for his potential involvement in Kok An’s alleged scam network. He is also involved in Cambodia’s gambling sector and happens to be Hun Sen’s personal adviser. The two tycoons are also linked by the marriage of their children.

BETWEEN FRIENDSHIP AND FAMILY

If Thailand’s casino ambitions and law enforcement border operations are the underlying reasons for Mr Hun Sen’s about-face, it is unlikely that he and Mr Thaksin will reconcile anytime soon.

Prompted by a decline in tourism inflows and broader economic threats, the Thai government is desperate to be seen doing something to rein in scam operations. These illegal activities have significantly undermined its reputation among Chinese visitors, a major source of tourists, who no longer flock to Thailand.

Make no mistake, Pheu Thai’s move to drop the casino Bill is purely tactical and not an indication that it has abandoned its plans. The deputy finance minister said as much when he stated that “it’s not the appropriate time”.

To Pheu Thai, casinos and more broadly, entertainment complexes would breathe new life into a sagging economy, weighed down by weak consumption, an uncertain export outlook and lumbering tourism. And an improving economy is what Pheu Thai and the Shinawatras are ultimately betting on for political survival.

Mr Thaksin would have preferred to keep Mr Hun Sen on his side. But between their friendship and Ms Paetongtarn’s political longevity – and by extension the fortunes of the Shinawatra clan – he has chosen the latter.

Harrison Cheng is a Director in risk consultancy firm Control Risks.