The official answer is actually logical and can work, but I think I have an even better one.
Unfortunately "ThunderChicken" already have said the answer I've thought of, but I'll explain more clearly.
The winning master of the previous contest is obviously a bit of a wise-a** (like philosophy masters out to be); so he decided not to wait for the master to turn on the light and to use the situation to his advantage.
The Grand Master had turned the lights off and unless given otherwise – it was pitch-black to our concern. In full darkness all the hats are black, even if they're white with the lights on.
Now if you think I'm a bit of a wise-a**… then first of all… you're right. Second – here's the scientific answer – Color of an object is the way we perceive light determined by its frequency which is determined by the way light interacts with the object. So!... when there's no light – there's no color... there's only black.