Is it possible to think that you, the OP, and several other people paid off that person's debt? And he, happy that he didn't lose his motorcycle, went home? Do you think that's good? Do you believe that you helped him? What'll he do next time? The same thing. If he's so crazy about gambling that he bets everything he owns, it's only going to get worse. He needed a very bitter and harsh lesson, and you indulged in his passion continuing. Although I haven't heard of such stories, when bookmakers allow betting on property without funds, I've listened to something else. People lose at cards—lose a lot—but their debts are not considered worth paying by anyone else. Therefore, sometimes we don't help, we deceive ourselves that we are doing good.
My greatest blame goes to the betting shop for allowing him bet with his bike, it clearly shows they have interest in confiscating his propeerty upon funds loss and also the foolish man that trusted his instincts in gambling enough to pledge with his only source of livelihood as a collateral, anyways, addiction can render gamblers very stupid.
In as much as I validate what you're saying in some way since I believe people learn better when they've hit a rock and made to sufferin order to right their wrongs, but in the case of OP, I think he and the others did the best thing and I would tell you why. We live in different countries and matters are handled differently. In your country, there might be things like social services which comes to people's aids, and when such matters are reported to the police, the guy is compelled to pay back the money within a timeframe and he goes back home unhurt. He might be arrested and the government takes care of his family until he returns.
In some countries, that singular act from the gambler can send him to his early grave if issues compound, the argument might be heavy and they start beating him and the story changes and even if he is arrested, his family is left unattended and might even result to something worse for the Innocent people in his family. We can see that he was pleading for his bike to be released so he can continue hustling with it and repay the money, this would tell you that the bike service is his only source of income, and he was foolish enough to stake with it. The best thing in such country as OP is just what they did and warn the cashiers seriously to always collect money from him before allowing him to gamble.