Don't use much money if you are not prepared to lose. That's something they have to remember. Only use money they can afford.
I would say that "dont use money if you are not prepared to spend them". I will get back to my losing=spending vision. Lets take two activities, gambling and lets say bowling. Both activities are for entertainment, for having fun. We have lets say similar budget, $30. We place bets, win or lose, get fun or feel unhappy. We throw ball, his strike or miss, get fun or feel unhappy. If we put this situation on OP question, then he is doubting that missing bowling pin is fun, however people keep playing bowling.
Yes, you are right because preparing funds to gamble means you are ready to lose. You will ultimately try to accept whatever the outcome is so that you will at least learn a lot from gambling.
If you place a bet and whatever the result, win or lose, you will not try to chase more wins or recover your losses. You just want to have fun gambling in your free time. You don't want to try to win bigger wins because that comes with risks.
By using a budget for gambling, you will not exceed the limits you can afford. You will also think that gambling is just for fun in your spare time so you will not think about gambling excessively.