One week a guy, Mr Basil, receives a phone call. The phone call just says "bet on Lucky Stallion in the horse race" and Mr Basil watches the horse race and sure enough, that horse wins. The next week, Mr Basil receives another phone call. It says "bet on Clover Fax in the horse race" and so he does, and he wins big. The third week, Mr Basil gets a call and says "I've given you the winning horse for the last two weeks for free, but if you want this week's winning horse, you'll need to first send me $10,000"
So the question here is, how does the caller know the winning horses?
I ruled out a lot of different theories.
1) It's not a pyramid scheme
2) Mr Basil was watching the actual live races, not recordings of past races
3) The caller didn't fix the races in any way
But what helped me figure out was when I figured out that
4) The caller didn't know who was going to win the races.
Here's the solution:
The caller had no clue who was going to win at all. He just called a bunch of random numbers. Say that there were 10 horses in each race. He calls 100 people and tells groups of 10 people each a different horse that is going to win. Whatever horses lose, he never calls those people again. Whatever 10 had a winning horse, he calls next week and tells each of them a different horse. Whatever person he happens to have told the right horse, he calls the next week and asks for $10,000. Then he takes the money, picks a random horse, and disappears.