The St. Paul City Council approved new rules Wednesday for distributing money from charitable gambling to youth organizations in the city, after backing away from a more drastic change that would have eliminated a key funding source for some groups.

A portion of money collected from pulltabs, bingo, paddle wheels, tipboards and raffles in St. Paul goes into the city’s Youth Fund to support programs including Boy Scout troops, sports teams and booster clubs.

To qualify for a cut of up to $8,000, those groups must now demonstrate that the majority of their participants either live in low-income neighborhoods, are eligible for free or reduced-price lunch or attend a school or district where all students receive free meals. Booster clubs organized by recreation centers in low-income neighborhoods will also qualify.

Previously, organizations needed only to be incorporated nonprofits that provide programs for St. Paul youth to get into the “10 Percent Club” — a list of programs where gambling organizations can choose to send the required portion of their proceeds.

Council members Rebecca Noecker and Jane Prince sponsored the ordinance, with input from St. Paul Youth Services’ YouthPower program. Their initial proposal would have required that qualifying programs serve mostly youth living in areas of concentrated poverty.

At a public hearing March 6, some program leaders raised concerns that they would no longer qualify under those criteria.

The council was scheduled to vote on the ordinance change March 13 but delayed approval to get more feedback from groups already receiving money through the program. At a second public hearing Wednesday, Janet Lawson, executive director of Shakespeare in St. Anthony Park, said she was happy with how the ordinance turned out.

“We are very pleased with the outcome of your more inclusive process,” Lawson told the council, “and feel that it is a really strong solution for the kids of St. Paul.”