Or maybe they're just in the denial phase where they claim that they are enjoying gambling despite losing, but in reality, losing a thousand bucks, or even more hurts them from the inside.

For me, the excitement in gambling lies on when you're betting using real money. You will not feel any excitement if you're betting on a demo account because at the end, you will never win money on it. Now to answer the question, it all comes to mindset yet again. I enjoy betting despite losing because I don't care even if I lose my money by putting some bets. I gamble for fun, and not for money so it's okay for me to lose (if I lose), because like what I said, excitement comes from gambling REAL money. If I lose, I'll just say "It's just the same when I bought a cinema ticket, and I had fun watching it."

We all have different reasons. Some don't feel the excitement playing free games. Some gamble just to add some excitement while watching. Some gamble because... they just want to gamble.