The game of loo, formally known as Lanterloo, is a simple trick-taking game akin to Euchre or Spades. It has the benefit of being flexible, as it can accommodate anywhere from 3-10 players (but 5-8 is best); however, it gains most of its popularity on the gambling aspect. It is traditionally played for chips, which may or may not represent money. While rules vary from place to place and from time to time, the general form is thus:
You use a full deck, with aces high, although the Jack of clubs is the highest trump, and is known as the Pam. You deal a number of cards to each player; I am describing five-card loo here, although three-card loo is also popular and may be more popular in tournaments.
The dealer starts by putting five chips in the pot, turns one card up to indicate trump for the round, and then deals each player five cards. Each player wants to win at least one trick, as if they do not they are 'looed', and have to put five of their chips into the pot. Before play starts, each player looks at their hand and may decide to fold, avoiding all penalties and gains for that round (if everyone folds, the dealer wins the pot). Any player who does not fold may then request to discard and redraw any number of cards (from 0 to 5). However, if one player discards/draws and the others do not, the player who exchanges instantly wins the pot and the round ends.
At this point, any player who has a flush may declare an instant win for the round, and take the pot. The winning flushes, from best to worst, are Pam with four cards of any suit; five cards of the trump suit; and five cards of any other suit. The player with the best flush takes both the pot and five chips from any player who does not have a lesser flush or the Pam.
The play then follows a standard trick-taking game, although with more strict rules of play than most games. The first to play must lead with trump if they are able; you must follow suit of the first card played each trick if you are able; you must beat the current best card if you are able; and thus, if unable to follow suit you must play trump if you can. Pam counts as the highest card of the trump suit, and is effectively not a club (unless clubs are trump). The winner of each trick starts the next trick, following the same rules.
Once the five tricks are taken, the pot is divided giving one fifth of the pot for each trick. Anyone who played the round and did not take a trick then puts in five chips for the next pot, and everything starts again.
There are a ridiculous number of odd rules that can be, and often are, added in; e.g., if the ace of trump is the first card played in the trick, the one playing it may declare "Pam, be civil", and following this Pam may not be played unless the player holding it has no other trump card; when only five chips are in the pool, no player may pass; when clubs are trump, no player may pass; the dealer may choose the size of the pot, which then also determines the size of the penalty loos; the dealer may (or must) take the trump-indicator card into their hand, and discard down to five; everyone must pay a loo into the pot if a club is turned over as trump; a dumby hand is often used if there are few players, and is played if a player passes the round; and this dumby, dealt face up, may be taken by a player in place of their own hand. Among others.
Part of the reason for the large number of variants is that Loo was very popular for a very long time, from the late 1600s to the mid-to-late 1800s, and was played in tournaments, as a form of gambling, and as a popular parlor game. It was popular in the upper and lower classes, and was appropriate for men and women to play. However, each of these situations might call for different specifics in rule complexity and amount of emphasis on gambling, and so many various forms emerged. Today very few people play Loo, and those who do are likely to simply default to the rules set out by Edmond Hoyle.