The next online competition in Pokémon Sword and Shield only allows players to use Pokémon that appeared on the teams of the Champions in each region. The Pokémon Champions are the best trainers in each region and the player needs to earn their shot at them, which includes beating eight Gym Leaders and the Elite Four first.
The Pokémon Champions are frightening because they're among the few trainers in each game who have a well-balanced. So many of the enemy trainers use either one or two Pokémon or use a team composed of one or two types. The Champions in the Pokémon games use a mixture of the best Pokémon in the game while keeping some Full Restores in their back pocket, just to add an extra layer of challenge to their battle.
The next online competition for Pokémon Sword and Shield is the Champion League, which has a list of Pokémon that's restricted to ones used by in-game Champions. According to Serebii, the registration for this event goes live on September 8 and the competition will run from September 23-25. The battles will use the Single Battle format and all competitors will earn 50 BP for taking part.
Pokémon Sword & Shield Champion League - Which Pokémon Are Allowed
The Pokémon allowed in the competition based on the Gen 1-2 Champions include Venusaur, Blastoise, Charizard, Sandslash, Ninetales, Arcanine, Alakazam, Magneton, Cloyster, Exeggutor, Rhydon, Gyarados, Heracross, Tyranitar, Vaporean, Jolteon, and Flareon (used by Blue, Champion of Kanto), and Altaria, Salamence, Dragonite and Aerodactyl (used by Lance, Champion of Kanto). The Pokémon allowed in the online competition based on the Gen 3-4 Champions include Aggron, Carbink, Skamory, Claydol, Cradily, Armaldo, and Metagross (used by Steven Stone, Champion of Hoenn), Whiscash, Wailord, Ludicolo, and Tentacruel (used by Wallace, Champion of the Hoenn region) and Roserade, Gastradon, Spiritomb, Garchomp, Lucario, and Togekiss (used by Cynthia, Pokémon Diamond and Pearl's incredibly difficult Champion of the Sinnoh region). The Pokémon allowed from the remaining Champions include Accelgor, Druddigon, Bouffalant, Escavalier, Volcarana, and Vanilluxe (used by Alder, Champion of the Unova region), Archeops, Lapras, Haxorus, and Hydreigon (used by Iris, Champion of the Unova region), Tyrantrum, Aurorus, Hawlucha, Goodra, and Gourgeist (used by Diantha, Champion of the Kalos region), and Aegislash, Rhyperior, Seismitoad, Rillaboom, Cinderace, Inteleon, Mr. Rime, and Dragapult (used by Leon, Champion of the Galar region).
It bears mentioning that this Pokémon Sword and Shield list doesn't include Pokémon used by Red or Trace, except in cases where another Champion had them on their team. The fact that the Alola region from Pokémon Sun and Moon didn't have a Champion explains the lack of Gen 7 Pokémon appearing on the list. It's still a meaty list with lots of great Pokémon for competitive battles, as characters would never have cut it as a Pokémon Champion if they didn't have a killer team.
Source: Serebii