Overview
I was having trouble finding this guy and thought I’d share my findings for others.
Where & How
So after much grinding in the wrong place I finally found him.
Area 3-1: Industrial District in an “Arena Zone”
That means the 3rd portal you can access, the mechanical robot area and the 1st map of that area; The Industrial District. Even more specific it was floor 2/3 of that map.
So I found him on 3-1 : 2/3 in an Arena Zone.
Arena Zone being any of the gated areas where the open button is an angry Sun face and you have to kill enemies in waves for a reward behind a gate.
You will see the gambler behind the gate as soon as you enter the Arena.
Also I’ve been told Arena Zones only spawn in the Up/North position so search around there.
Happy hunting.