Before they appear on the show magicians go through an interview with a producer and are required to explain to him all the secrets of their act. The producer is https://en.wikipedia.org/wiki/Johnny_Thompson - a magician himself - and as such he is bound by honor so to speak to not reveal their secrets - he only learns them because he will be the judge of whether Penn & Teller have been indeed fooled or not.
Later, during the live show, if Penn & Teller guess how a trick was done but the magician says "That's not how I did it" and he is lying, the producer communicates with the host and tells him/her "Don't listen to him, that's exactly how he did it, Penn & Teller are right" and the host informs the magician that unfortunately he didn't fool them.
I've seen the opposite happen as well: Penn & Teller make a guess, the magician says "That's not how I did it" but Penn & Teller don't quite believe him and ask him again "Seriously?? Are you certain that's not how you did it?!". Then the producer communicates with the host and tells him/her "He is telling the truth, he fooled them, announce him as a fooler to the audience."
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