But if they were worried about staying in compliance, I doubt they'd put it in black and white in the tryout packet. She said it says flat out "Paid Summit and Worlds bids will be invested back into the gym."
That does not sound like the wording of a business that either a) read that rule, or b) is worried about compliance. Maybe, "In the event of a paid bid, money already paid in towards worlds or summit trips will be invested into the gym." (I still would not be ok with that, since $650 isn't enough anyway, so I'd want what I paid in to go towards what was left to pay for, like FOOD - but at least it'd be "legal" then.)