In early May 2025, the situation on the India-Pakistan border escalated again, with large-scale exchanges of fire breaking out in the Kashmir region, resulting in dozens of casualties. This conflict not only poses a security threat to the South Asian region but also has indirect impacts on several Southeast Asian countries, especially in the aviation and gambling industries.
First and foremost, air traffic is directly affected. Due to the risks of war and airspace security restrictions, several international routes connecting India with Southeast Asian countries have been forced to cancel or reroute.
Direct flights from India to Bangkok, Thailand, Yangon, Myanmar, and Phnom Penh, Cambodia have been significantly reduced, with some routes even temporarily suspended. Several airlines (including Air India, Myanmar International Airlines, Thai Lion Air) have announced temporary adjustments to their flight schedules and warned passengers of potential long delays or changes to connecting flights.
This has dealt a major blow to the tourism industry and cross-border movement of people. According to the Tourism Authority of Thailand, India is its fourth largest source of tourists.
Every year, over 1.5 million Indian tourists visit Thailand, a significant number of whom are also involved in gambling-related travel, such as trips to the border casinos in Poipet, Cambodia, and Myawaddy, Myanmar. With aviation disruptions, a large number of gambling tourists have canceled their trips, directly affecting the tourism income and gambling revenues of Southeast Asian countries.
In Cambodia and Myanmar, casinos and gambling resorts are also feeling the pressure. Casino operators in Poipet and Sihanoukville, Cambodia, report a significant decline in the number of mid to high-end customers from India, with some casinos already cutting operational costs to cope with the reduced customer flow. Cross-border casinos in places like Myawaddy, Myanmar, are experiencing cash flow issues due to transportation disruptions. Additionally, peripheral service industries such as gambling intermediaries and chartered transportation are also in trouble.
On the other hand, the online gambling market is also affected. Due to some local telecommunications infrastructure in India being damaged during the border conflict, several operators report unstable network connections within the country, leading to a degraded experience for Indian players accessing servers in Thailand, Cambodia, and other locations.
Some Southeast Asian online gambling platforms report that since May 5, traffic from Indian IPs has dropped by more than 25%. Additionally, instability in payment and settlement systems has caused some players to fail in depositing and withdrawing funds, leading to customer complaints and a trust crisis.
Furthermore, the worsening situation between India and Pakistan has also triggered policy uncertainties. The Indian government has already intensified scrutiny of some cross-border financial transactions, and if the situation continues to deteriorate, more stringent foreign exchange control measures may be introduced. This will further affect the convenience and legality of Indian players participating in gambling in Southeast Asia and sound an alarm for gambling platforms reliant on the Indian market.
Overall, although the Indo-Pak conflict has not spread to Southeast Asia, its "spillover effects" have significantly impacted aviation transport, tourism gambling, cross-border payments, and other sectors. If the situation remains tense, it will not only cause short-term losses to the Southeast Asian gambling market but may also lead to platforms re-evaluating their risk exposure in the Indian market.
