You are right, and I do agree with you, it is always better to hold bitcoin and gamble with either Altcoin or stable coin, but the best (for me) for gambling is stable coin, like I have explained before in an earlier comment on this thread, stable coins are more stable in their price, so let assume one gambles with $100 in stable coin and loose it, the chances are very high that even in the next 10 years coming, that $100 loss will still be valued at $100.
But let's assume you Gamble with $100 worth of bitcoin today, and lost it, then like we have seen, the chances are very high that in the coming 5 years, that $100 worth of bitcoin that was lost will be now valued at $1000 dollars, because the price of 1 bitcoin has risen so much.
So, for me, stable coins remains my only currency for gambling on cryptocurrency casinos, and when it come to local casinos where I get another option for payment, I will gamble using my local currency.
In fact, if you lose $100 today, in ten years those $100 won't even be equal to themselves, and in fact that future loss will be even smaller, since the purchasing power of $100 in ten years will be significantly lower than it is today. So losing $100 today is not the same as losing it in ten years. It's better to lose $100 in ten years than to lose it today) But it will be even better not to lose those $ 100 equivalent in BTC. Because in 10 years this BTC amount will cost definitely more than $ 100.
What you both say is only true if you use BTC in your long term portfolio and it is bitcoin that you do not want to use in the near future. Otherwise there is no difference between using bitcoin or USDT for gambling if that is the money you intend to use for gambling purposes. Because in this case they only act as a payment method.
You use 100USDT to exchange for BTC and gamble, and you use 100$ BTC to exchange for 100USDT to gamble, what is the difference here?
If you feel it is a waste to use bitcoin for gambling, I suggest you can convert that BTC to USDT before gambling but for me, that doesn't make a difference either.