If it's reasonable for a 12yo to be able to play in a for-money tourney, then I don't think it's unreasonable to think they should know the difference between right and wrong.
As a parent of a now 13 year old - it is not reasonable for a 12 year old to play a for money tournament. 12 year olds may "know right from wrong" in some sense, but they do not have adult brains. Expecting them to make decisions like an adult, or understand "right and wrong" the same way an adult does, is ludicrous.
Then why should they be able to win money off adults?
Classic "have your cake and eat it too". If you want to play in tournaments with adult prizes then you should expect adult consequences for misbehavior.
They shouldn't be able to. But either way, kids don't have adult brains, and there's nothing anyone can do about that. They are physically different. You can't expect a 12 year old to dunk a basketball, and you can't expect a 12 year old to think like an adult.
