This can be any sort of plot where an organized competition isn't a simple Tournament Arc, but rather has a behind-the-scenes plot going on. Sometimes the tournament starts out by looking like a mere framing device for the story, then is shown to have a sinister behind-the-scenes purpose. Other times the behind-the-scenes plotting is used as The Reveal. Most of the time, this trope is used as either a setup for a Summation Gathering or the Big Bad's climactic attack on the hero. If there isn't some deeper hidden purpose to the tournament (and there really is just a Framing Device at work) then this isn't the trope you're talking about.
Regardless of the exact type of tournament this often results in whatever reward was promised to the winners being a ruse. At the worst the tournament is Unwinnable by Design. Sometimes its sinister purpose is derived from perpetuating the competition.
Since this is often presented as The Reveal, spoilers ahoy!
The Dragon Ball franchise has had many "World Martial Arts Tournament" arcs over the years. Sometimes they would lead to a bigger arc, and sometimes not.
Naruto's Chunin Exam arc features a single-elimination tournament as the final stage of the exam. Initially, the idea is that the contestants will fight each other and that the judges determine who should be promoted based on the performance. However, it is soon explained that that function is more of an in-universe Excuse Plot to showcase competition between villages. Said competition affects incoming business for each village.
The tournament is ultimately interrupted before the end of the first round by an invasion. In addition, the only competitor to gain the 'prize' of promotion to chuunin was a guy who surrendered in his one fight.
Besides the invasion plot and the display aspect, Gaara and Neji use the tournament for personal grudge matches. While killing is not encouraged in the tournament, it's not prohibited either
Revolutionary Girl Utena: The winner of the Rose Duelists' tournaments will hand over the godlike power of Dios to Akio, then be promptly disposed of.
Shitsurakuen: Whoever collects all six seals in Exaclan will... actually, never mind, the ending is too confusing to tell, but it's certainly not about rounding up a six-girl harem.
Master of Martial Hearts is a big time (and convoluted as hell) case of this. The tournament revolves around the "Platonic Heart," a mythical jewel that can supposedly grant any wish to a girl who acquires it. Every girl who loses the tournament is Mind Raped into an Empty Shell state before being conditioned into sexual slavery and sold. The entire thing is being conducted as a Cycle of Revenge by the daughters of two sisters who wound up on the losing end of a similar tournament organized by Aya's father, which Aya's mother won. The two cousins want the same thing their mothers got put through to happen to Aya as revenge against both of her parents, and they don't care about what happens to the other contestants.
Mahou Sensei Negima! had a tournament whose hidden purpose was to gather evidence of the existence of magic and flood the media with it.
Virtually everyTournament Arc in Yu-Gi-Oh! to the point where a filler arc has a character comment in-story how refreshing it is to go to a tournament that's only a tournament (it still manages to get hijacked by a villain's scheme, but at least that wasn't in the host's plans).
The first tournament in the series is the Rando plot, where the competitors to be trained by Genkai wound up fighting single-elimination as the final qualifier. Yusuke is actually sent there to keep the serial killer technique-collector Rando from becoming her successor, not to win... although Koenma also calculated that this is the only way Yusuke was ever going to get any proper training. Meanwhile, if someone who couldn't be trusted with her skills had won, Genkai intended to kill him in a 'training accident.'
The Dark Tournament Saga is already pretty, well, Dark, but then it is revealed that the true purpose is for betting and power brokering behind the scenes.
The later Demon World Tournament is a complete aversion of this trope, especially considering where it takes place.
The "D of D Tournament" in Kenichi: The Mightiest Disciple, where both the bad guys (who organized the event) and the good guys are engaged in various activities behind the scenes which are as important as the tournament itself. The climax of these background activities takes place simultaneously with the final tournament battle between Kenichi and Kanou.
G Gundam has the Gundam Fight, which occurs regularly every four years. However, in the 13th Fight we have the Devil Gundam getting loose and trying to destroy the planet, while several nations vie to find and take control of it for their own purposes.
Fairy Tail Grand Magic Game Arc reveals around four things going: a conspiracy in the background involving a Time Travel plot to kill the legendary dark mage Zeref before he does all the bad stuff he is infamous for, some mysterious girl wandering around, who turns out to be Lucy from a Bad Futureand some unspoken danger that is going to destroy the place unless the second conspiracy succeeds in it's own plan.
One is shaping up in One Piece as Luffy has entered one to win the Flame Flame fruit, which once belonged to his dead brother Ace. However, as this is exactly what the Big Bad of the arc wanted him to do, it is no doubt also a trap.
Furthermore, it seems that the Marines intend to break up the tournament.
In Gamaran, the Great Competition of Unabara is apparently a way to find out which of the 31 chosen schools is the strongest and which son will inherit the fief. Is actually a ruse orchestrated by Jinsuke Kurogane, so that his Muhou School can reinforce its lines with strong martial artists, eliminate the daimyo with nearly all his sons and use the surviving one as a puppet king so that they can use Unabara's riches to build up an army and challenge the Bakufu.
In The Quick and the Dead, the gunfighting tournament is primarily a way for the Big Bad to eliminate any threats to himself and intimidate any of the locals who might try to oppose him. He knows that there is an assassin gunning for him and that the Kid is itching to take him on. The tournament is a trap for them to face him in the open where he can gun them down in a duel. It is implied that if anyone proves too much of a threat, his Mooks will gun that person down.
In Enter the Dragon, the hero participates in the tournament, but was actually sent there to uncover the evidence about the tournament organizer's criminal activities.
In DOA Dead Or Alive, the villain's tournaments are used to collect fighting information to create sunglasses that turn the wearer into a master martial artist.
The Odyssey: When Odysseus returns to Ithica, he orchestrates an archery competition for the suitors that have been vying for his wife's hand while he was away. Odysseus wins the tournament, being the only man strong enough to string his old bow in the first place, to prove his identity. He and his son then proceed to massacre all the suitors who showed up for the tournament.
Knights Of The Forty Islands: The team that first comes to control all 40 eponymous islands will be sent back home... NOT. Actually, the game is rigged so that no team can ever achieve victory, and the kids can never ever go home again.
Fred Saberhagen's Berserker novel Berserker's Planet. A cult on Hunter's Planet regularly has tournaments where the contestants fight to the death. Little do the competitors know that the ultimate controller of the cult is a disabled Berserker which is doing its best to carry out its programming to destroy all life.
Doubly subverted in Harry Potter and the Goblet of Fire. Everyone thinks its a ruse to kill Harry during the contest. In truth, it is rigged for him to win, so he can be captured at the moment of victory. Note that the Tri-Wizard Tournament isn't evil by design, just hijacked by the villains in that particular instance.
Deltora Quest - Book IV: The Shifting Sands. Leif, Barda and Jasmine enter in a tournament for money to continue their travels. The problem is, the tournament is a trap. After Jasmine wins, they are kidnapped by the evil Shadow Guards as a method of keeping the population quiet IIRC.
"The Mystery Knight", one of the "Dunk and Egg" prequel stories to A Song of Ice and Fire, takes place during a tournament that's secretly a gathering for conspirators trying to start a second Blackfyre rebellion.
Also, supposedly the infamous Tournament at Harrenhal was reported to be one of these. The only reason King Aerys, who had not left his castle for some years, attended, was because he had been told that his son Rhaegar was gathering the nobles of the realm to plan for a coup. This story has not yet been confirmed.
This happened a few times on Tales from the Crypt, where a contestant in a contest murders the odds-on favorite, but finds out too late that the "prize" for winning is death. In one case, an actor literally kills for a chance to play Hamlet, but discovers that he was really auditioning to play Yorick [the skull]. In another case, a Beauty Contest contestant kills another, but discovers that the pageant is "Miss Autopsy".
In the Leverage episode "The Queen's Gambit Job", the heroes set up — and then rig — a blitz chess tournament as a way of distracting the mark of the week during a theft.
The archery tournament in the various versions of Robin Hood. It's simply a ruse for the bad guys to flush out Robin, knowing full well that he would not resist entering the tournament and winning it, especially if the prize is a kiss from Maid Marian.
Champions campaign The Great Supervillain Contest. The Crimson Claw sets up a competition among the Earth's greatest supervillains to determine which one is the most powerful. The prize is the Emerald Eye of Azog, which will increase the winning villain's already great abilities. What the villains don't know is that once the winner bonds with the Eye, it will take him over and turn him into a gate that will allow dangerous demons to come to Earth.
The plot for Mega Man 6 involves a certain Mr. X, who is totally not a disguised Dr. Wily, organising a fighting tournament for robots with prizes for the laboratories developing them; Mega Man has to stop the eight finalist robots of the contest after Mr. X reprograms them to Take Over the World in his stead.
This is pretty much The King of Fighters in a nutshell, most prominently during The Orochi Saga ('95-'97) and The Tales of Ash (2003-XIII), where the primary motive of the baddies is to unsealOrochi (although for varying, but no less equally evil purposes). This has happened so frequently that characters start lampshading why there can't be a regular fighting tournament that doesn't serve as the instrument for The End of the World as We Know It every once in a while.
The NESTS Sage ('99-'01) was also this too, but got complicated due to in-fighting of the members who each had their own little plan.
Bloody Roar can be best described as X-Men meets the King of Fighters. Each tournament revolves around diplomatic tensions between zoanthropes and humankind due to experiments being conducted on zoanthropes, behind the scenes. The tournament itself is merely a front to lure the strongest of their kind to be test subjects, by pitting them against others of their kind with legendary beast power... or genetically enhanced super beings.
Chapter 3 of Paper Mario: The Thousand-Year Door has Mario enter the Glitz Pit fighting arena, as the champions belt has the next Crystal Star for a buckle. A few fights in, Mario starts getting strange text messages, fellow fighters are disappearing mysteriously and the Crystal Star turns out to be a fake.
In Street Fighter II, Bison's holding a tournament to get revenge on the characters who ruined his plans in Alpha 3. In Street Fighter IV, Seth from S.I.N. (Shadaloo Intimidation Network, the weapons division of Shadaloo) holds a tournament to gain data (and Ryu) to complete his BLECE Project, an unknown bioweapon. The tournament in Street Fighter III: New Generation/2nd Impact subverts this, though. The Illuminati is judging people the world wide to see who is fit to live in the new utopian world foretold in their ominous prophecy, but their leader Gill is a Well-Intentioned Extremist.
SNK vs Capcom: Match of the Millenium has a tournament that actually turns out to be a project by both Geese Howard and M. Bison to gather powerful warriors to make into a clone army. The victor of the tournament would go on to fight three clones (Leona, Kyo, and Haohmaru, if you're playing as a Capcom character; or Morrigan, Zangief, and Akuma for an SNK character) before fighting Geese and Bison, then finally, either an Orochi-empowered clone of Iori, or a Satsui no Hadou-empowered clone of Ryu.
Tekken 2: Kazuya announces the King of the Iron Fist Tournament 2 to get rid of Heihachi and his other enemies. Tekken 3: Heihachi announces the King of the Iron Fist Tournament 3 to lure Ogre out in order to capture him using the contestants as bait. Tekken 4: Heihachi needs to get the devil gene to become immortal so he announces the King of the Iron Fist Tournament 4 to lure Kazuya and Jin out to obtain the devil gene. Tekken 5 Jinpachi announces a King of Iron Fist Tournament in the hopes that someone will defeat him before he is overtaken by the Devil Gene and destroys the world. Tekken 6: Jin announces a new King of Iron Fist Tournament as part of the Mishima Zaibatsu's war against G Corporation, which is run by his father Kazuya.
Persona 4: Arena is set up as a tournament hosted by Teddie. It's a Midnight Channel dungeon for Labrys, one of Aigis's sisters. Even more intriguing is the Malevolent Entity who's playing with the whole thing. What seems to be a mere spin-off may actually be a Wham Episode for the entire Persona series if it's confirmed that he's Nyarlathotep, Big Bad of Persona 2 and Chessmaster of the first game. There's even another theory that makes him the Bigger Bad of Persona 3 and 4.
Interestingly, the original Mortal Kombat both is and isn't "just a tournament" (following some Ret Canon post-movie). It "is" in the sense that the gathering of the warriors for the tournament itself has no pretense other than just a gathering of warriors but it "isn't" as well because each individual tournament counts towards a rolling total of wins or losses. Should a realm lose ten times consecutively in Mortal Kombat, then they forfeit the right to hold back an invasion by the realm they were competing against.
The sequel abides by this trope fully, though. The second tournament is merely so Shao Kahn can divert the Earthrrealm warriors' attention away from their home realm by keeping them preoccupied in Outworld. His goal is to resurrect Sindel in Earthrrealm, the consequence of which plays out in the following sequel. After Mortal Kombat II, the entire concept of the Tournament Arc is dropped from the series altogether, symbiotically rendering this trope moot as well.
Teen Titans episode "Winner Take All". A number of teen superbeings are teleported to an unknown location, where the Master of Games invites them to take part in a Tournament of Heroes that will determine which of them is the greatest young hero on Earth. What the competitors don't know is that when they lose, they're trapped within the Master's jewel so he can use their powers.
The World Grand Prix from Cars 2 was actually organized by the Lemons just so they can zap all of the competing race cars with a deadly radiation cannon as an attempt to discriminate all alternative energy sources and force everyone back to using gasoline.