To knock the referee out, either run into him or punch him twice. He'll get up in a few seconds, but while he's down you can perform illegal moves in the ring.
An easy way to beat the Royal Rumble is to play with two players. Have one player stand next to one rope, and the other stand by the other rope. As soon a computer player enters the ring, get him in a grapple and throw him to the other human player. The human player can then easily hiptoss him out of the ring.
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