i don't think there's a good way to do this. if you do a custom resolution in retroarch that includes some padding it
a) won't solve the issue in non-libretro games/emulationstation, etc.
b) will need to be done for each arcade game as they have many different resolutions.
the only way i can see is using the overscan settings to add some overscan to give you a vertical border. eg: https://elinux.org/R-Pi_Troubleshooting#Big_black_borders_around_small_image_on_HD_monitors
you'd want something like
disable_overscan=0
overscan_top=20
overscan_bottom=20
overscan_scale=1
increase the 20 for _top and _bottom until you get the right amount of border.
however that will
a) mess up the aspect ratio of the games, making them look fatter. i guess you could add
overscan_left=X
overscan_right=X
where X is the same as the number you're using above.
b) give you some pretty brutal scaling artefacts, since you're fairly low resolution to begin with.
maybe there's another way...