Yes that's right, actually this is a misunderstanding in addressing what gambling actually is, not understanding what they are doing makes them end up with an inability to accept the reality when they lose which ultimately makes them gamble based on the emotions of losing and instead chasing wins in order to break even or as an action to restore all that has been lost, whereas in gambling defeat is a very natural result because gambling always involves luck which means that if you are unlucky then obviously you will lose and lose some money.

Of course as you said that chasing losses will only make them experience a much larger number of losses, I would support their actions if they could control their luck, but isn't that impossible? obviously because after all luck is something that always cannot be predicted when it comes and when it goes. So the point is the understanding of gambling, especially opportunities and risks must be really emphasized, not only that, you also have to understand how luck really works, with that then I think you will not be rash to act carelessly and excessively.