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That's why its never a good decision to finance them knowing that their activities done is so risky to participate and if they lose for sure they might get broke then struggle financially, that's why our chance to get paid for what we lend to them is so slim. So to avoid any problem related to this stuff much better if we should not let them borrow our money and give them good advice regarding on financing and their poor gambling activity since for sure it can help them more rather than allowing them to do what those things can destroy them.
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Giving a piece of advice so they can comprehend is certainly a good thing instead of rejecting them all alone. That is a good initiative, especially since the context is a friend. I think it plausible that if someone needs to borrow money to gamble, there is a high likeliness they are addicted. So we should not completely ignore such kind behaviours.
Another supporting reason for that is it would prevent, as what you said, a destructive consequences. Who would want to see their freind into a financial ruins? Certainly, there is no obligation that one should take responsibillity, but it wouldn't hurt to have a words with those who faced addicction condition.