The lose their mind when they realize that they were living in a land of dreams when they entered the casino with the hope of becoming a millionaire in a day. Sometimes people block away their common sense in order to dwell in the fantasies - in this case it is getting rich quick which is the ideal way to lose money.
While on a losing streak most people continue to gamble and they cant stop because they either want to make up the money they lost or they want to try their luck still. Both of them end in the vicious cycle.