Can someone tell me why kids are allowed to play sports in areas

North Cape May - Can someone tell me why kids are allowed to play sports in areas where they aren't residents? I thought it was only allowed if the town or area didn't have a team. I know of a family who lives in Lower Twp. whose son is being allowed to play a youth sport in Wildwood, when they have a team that is for Lower residents. If all parents are allowed to do this, slowly areas will lose teams due to non-participation!