I am looking forward to playing in the World Open this year.  I will be playing in the under 2000 section since I won the under 1800 section in a tournament earlier this month. I noticed this rule under prize limits:

If official rating 7/11-6/12 or unofficial post-event rating posted 7/3/11-7/3/12 was more than 30 points over section maximum, prize limit $2000.

Is this a rule to detter sandbagging?

Yes they are trying to cut down on the amount of sandbagging.

What is sandbagging and why is it bad? 

[interesting fact:sandbagging sounds similar to teabagging, which is the act of squatting on someone's corpse reapeatedly in a shooter game] 

If you think that's what teabagging is, you need to go to urban dictionary.

A sandbagger is someone who falsely lowers his rating so as to get a competetive advantage in what should be similar competition.

In chess it goes to someone who has a (falsely) lower rating. Usually you see this in chess tournaments with a high cash prize in a class or section.

I don't trust urban dictionary.

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Can you sandbag on chess.com. As in, play suicide chess over and over until your rating is crap then pwn all the nooblets? 

There's no point to it. You may as well just play lower rated players.

The question wasn't directed at chess.com games. It was directed at over the board games that are played for money.  I was mainly wondering if their are people that still sandbag with the prize limit dropping by a large amount.  For instance the under 2000 section top prize is 13k, and the entry fee is about 300.  It seems to me that playing for 2k would dissuad people since they could have attended and won multiple tournaments for prizes totaling over 2k in the time it would take for them to sandbag for the World Open.

Awww Helltank, so innocent..

hahahahaha