<human>: Give me a shortened version of the text

We've been pretty good pals since working together about 10 years ago (it was an overseas contract job in a really small tight knit community). I've traveled the world with this guy, been through a lot, and know him as well as a brother. He's in town helping his ill mother and while meeting up for drinks he asks me how I'd feel about lending him some money (about a grand). 

I don't consider that this would be a "loan" as much as a gift and I don't know if it's okay to ask what it's for. 

The guy does contract work here and there, but is currently unemployed, has a fairly significant gambling problem, etc. He promised that he'd be able to pay it back and was willing to draw up a contract, I said give me some time to think about it, made some joke about sexual favors and changed the subject. 

I guess, I'm wondering if you all have a general opinions on loaning money to friends. The amount isn't really significant, but I certainly wouldn't want to just throw it away. I've generally avoided lending money to friends in the past. Will not lending money be as detrimental as lending it and not being paid back?
<bot>: Friend of 10 years asked for a $1k loan, I'm doubtful that it would be paid back. Tips?