I have worked at gyms that had specific arbitrary cut-offs like your and it was due to size constraints. Once the team got maxed out on ratios, the simple answer was to have a cut-off age and stick to it. This enabled the "a-team" to have first dibs on the best equipment/best coaches. It was a business decision that benefited the gym, even though it was not in the best interest of some of those kids. I have also worked at gyms that took the unhappy b-team kids from gyms with arbitrary age cut-offs, and turned them into competitors who beat kids from the very teams they left. Keep in mind, these were kids who were very talented, just didn't meet an age cut-off (because they didn't start gymnastics until elementary school). These were not kids who belonged on the "b-team" because of a lack of talent or potential. I don't know where your daughter fits. If she is talented but got a late start, try out at another gym who doesn't give up on slightly older kids and see where they would place her. If the talent and drive is there, she can "catch up."