I have a little different take on this...
This was a Beat The Streets Developmental tourney. This kid's background is unknown to us, and were it known, would probably be foreign to a lot of us. For all we know, he could be living with a single, ineffective parent, or could be in the foster care system. He may not get three squares a day, may not have a bed to sleep on, or may be trying to raise his brothers and sisters himself. He may be surrounded by people continually trying to lead him down the wrong path. He may not have a figure in his life to teach him right from wrong. My wife teaches here in central PA, and sees this stuff all the time, let alone Chicago.
None of this is an excuse. There needs to be consequences. But, if those things above are going on, and if wrestling is this kids way to escape it, by all means don't toss him from it for life. And, I hope like hell that there's someone that can put an arm around him and say, "You're being punished, here's why, and I'm going to help you do better next time." Then, keep him interested in the sport during that period.