Meaning:
"放" means to "release," and "水" means "water." The slang term either means "intentionally bending the rules to let someone off the hook" or "losing a sport game on purpose after reaching a deal with the other side."
Example:
A: 真不明白小李怎么会输掉这场比赛。他可是我们学校最厉害的象棋选手。
Zhēn bù míngbái xiǎolǐ zěnme huì shūdiào zhèchǎng bǐsài。Tā kě shì wǒmen xuéxiào zuì lìhài de xiàngqí xuǎnshǒu。
I don't understand how Xiao Li lost this game. He's the best chess player in our school.
B: 说不定是他故意放水，听说赢了他的那个家伙送了他一部苹果手机。
Shuōbùdìng shì tā gùyì fàngshuǐ, tīngshuō yíng le tā de nàgè jiāhuǒ sòng le tā yībù píngguǒ shǒujī。
It's possible that he lost the game on purpose. I heard the guy who beat him gave him a iPhone as a gift.
(First editor: Debra Li)