My question now is are there any moral, ethical or legal obligation to bar a person from gambling after physically observing that he is mentally unstable?
I was surprised when I read the post title. There's nothing wrong if someone who is mentally unstable wants to gamble. Gambling is open to everyone, even those facing mental health challenges. As long as they can place bets and participate in the games, they should be able to enjoy gambling like anyone else. It would be unfair to deny them this right just because of their mental health. I appreciate that the attendant in your post was kind to all customers, regardless of their situation. Sadly, in my local area, I've witnessed people treating mentally unstable individuals poorly, refusing to sell to them even if they have money. They seem repulsed when these individuals come near them. I don't understand why mentally unstable people shouldn't be allowed to gamble.