The same way we have the Paralympics – which are held for athletes with disabilities.
By the way, transgender and intersex are not the same. Transgender people do not identify with the gender they were assigned at birth. Even if, erroneously, it is still standard practice in many societies to conflate one’s gender with their external genitalia. That is, a person born with male genitals would be assigned a masculine identity, but may later identify as feminine, not masculine. Therefore, this person is a woman. Similarly, someone who was born with a vagina might identify as a boy or a man later on in life. Hence this person is a man.
Most people identify with the body they were born in, which is refered to as cissexuality versus transsexuality described above. On the other hand, many people do not feel like solely a man or a woman but somewhere on a continuum between the two genders. These people often refer to themselves as non-binary or multi-gendered. Others may not feel any attachment to any gender at all or agendered.
Intersex refers to a variety of conditions in which a person is born with reproductive or sexual features that don’t quite fit the typical definitions of female or male. For example, a person might be born appearing to be female on the outside, but having mostly male-typical anatomy on the inside. Or a person may be born with genitals that seem to be inbetween the usual male and female types.
To participate in the just concluded Rio 2016 Olympics, the International Olympic Committee (IOC) released revised guidelines for trans- and intersex athletes where sex reassignment surgery will no longer be required. Female-to-male transgender athletes are eligible to take part in men’s competitions without restriction and male-to-female transgender athletes will need to demonstrate that their testosterone level has been below a certain cutoff point for at least one year before their first competition.
The IOC stresses that the overall objective of sport remains the guarantee of fair competition and without the exclusion of trans and intersex athletes.
In this instance, fairness would be a difficult concept to define and hence enforce. Historically, of course the recognised physical difference has been separate sporting competition for male and female bodies. Since we now know that many people identify psychologically and socially as non-binary, multi-gender and others physically as intersex; it is difficult if not erroneous to categorize them neatly into categories of ‘male’ and ‘female’ for purposes of sport. The default position for the IOC appears based on protecting fair competition particularly for female athletes from unfair advantage by more ‘masculine’ presenting athletes, such as ‘hyperandrogenism’ in female [-identifying] athletes. Examples here include; Castor Semenya of South Africa and Dutee Chand of India. In order not discriminate against such individuals the IOC decreed that if not eligible for female competition – according to the new guidelines – the athlete should automatically be eligible to compete in male competition.
Trans and intersex athletes have experienced wide discrimination, abuse and ridicule questioning their gender, sex and sexuality on public platforms. The new IOC guidelines have opened more space for inclusion for non-normative identities although this is still restricting to some degree.