I have seen people who misuse loans before, but never this badly to be fair. Usually people take out loan to pay off their debt that made for material stuff, like they keep on buying stuff, luxury bags, latest phones, nails, saloon hair stuff, some house things like tech. We should consider the fact that people who are making these mistakes, do really see that they are making a mistake and yet do them anyway.
I mean did the person who took out a bigger loan, just to gamble, did not know that he may lose? I mean it is simple math, it is gambling and you could either win or lose and he knew that if he used that loan to gamble then he could lose that as well. So he did not really do anything that he did not expected as a result at all.
If they take loan for filling their daily needs, that will not be a problem because that is the important things in their life. If they take loan for buying stuff or luxury things that is not necessary for their life, that will not recommended because that is not too important for their life. We must consider what we needs to survive if we wants to take a loan but if we can manage our finances properly, we don't have to take a loan.
If they take a loan for playing gambling and lose that money in gambling, they must repay the loan because the lender will not lets them away without paying the loan. Take a loan must gives back the money and if they can't repay, they can gets in jail because they don't gives the loan money to the lender. People must not take a loan for playing gambling especially if they lose their money. If they lose, it is better to stops from playing gambling so they don't have to lose more money.