"That competition is held by the king."
Translation:Perlombaan itu diselenggarakan oleh sang raja.
I got an answer from a native speaker. "Kompetisi" as @BenShaw49503 suggested is okay. But "persaingan" is not interchangeable with "perlombaan" in this sentence.
Persaingan: "rivalry" and "competitiveness" are the meaning. It's not about a competition event, but the state of mind or the tense relationship between rivals. Therefore, "persaingan" cannot be held (organized) by the king. Toyota and Ford, for example, compete with each other in the same industry. So, you can describe such a competitive landscape as "persaingan". The root word "saing" means "competitors" or "rivals".
Kompetisi: "Kompetisi" is a synonym of Perlombaan. "Kompetisi" is used for professional sports events in general, especially for the ones with titles (e.g. the World Cup or Rising Star). But for small sports events (i.e. an elementary school soccer tournament), it is called "perlombaan". As for competition TV programs such as American Idol, it is called "kompetisi" because it is big. Also formal business competitions are called "kompetisi".
Kontes: "Kontes" is another synonym of "perlombaan". "Kontes" is used for beauty contests ("kontes kecantikan") and singing contests ("kontes menyanyi"). Basically, "kontes" is for an event where you show off your skills or quality.
"Perlombaan": Writing contest (lomba menulis); science competition (lomba ilmiah); running race (lomba lari); fishing competition (lomba mancing). Those can be from a small scale to a national one.
For more information, check out the answer from a native speaker. https://hinative.com/questions/18273956