A permit held by the sportsman (7)
I believe the answer is:
athlete
'sportsman' is the definition.
(type of sportsman)
'a permit held by the' is the wordplay.
'permit' becomes 'let' (synonyms).
'held by' indicates putting letters inside.
'let' inserted into 'the' is 'thlete'.
'a'+'thlete'='ATHLETE'
(Other definitions for athlete that I've seen before include "Sportsman in physical contests" , "Track eventer" , "Sportsman in track or field events" , "fine physical specimen" , "One who's good at sport" .)