There are many cases in history of males who competed as females in the Olympics.
That is why we need a third division. Here are just a couple cases:
*Perhaps the earliest known case is that of Stanisława Walasiewicz (aka Stella Walsh), a Polish athlete who won a gold medal in the women's 100 m at the 1932 Summer Olympics in Los Angeles, but who after her death in 1980 was discovered to have had partially developed male genitalia.*
*Before the advent of sexual verification tests, German athlete Dora Ratjen competed in the 1936 Olympic Games in Berlin and placed fourth in the women's high jump. She later competed and set a world record for the women's high jump at the 1938 European Championships before tests by the German police concluded that Ratjen was a man. Ratjen was likely an intersex individual, based on the physician's description who conducted the examination. Though raised as a girl, Ratjen later took the name Heinrich Ratjen following an official registry change.*