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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 likelihood 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, destructive consequences. Who would want to see their friend in financial ruin? Certainly, there is no obligation that one should take responsibility, but it wouldn't hurt to have words with those who face addiction conditions.
Not good to leave them alone if the affected person is our friend or relative since we can do something to help them by giving advice and if we just leave them because they are not really worth the help then maybe they might experience more the worst. So its good to give them advice so they can realize that everything they do is not good and they should not bet excessively so that no funds intended for more important matter used for gambling. They should learn from their mistake so they can correct their bad behaviors.
Although we don't have obligation to do this thing but for sake of humanity maybe a simple word of advice can help them to determine what's good and bad for them.