1) You laugh, you lose.
2) It is a game where you look at funny images, videos, etc and try not to laugh. If you laugh, you lose the game. Also, note that there is NO WINNING in this game. You can only lose.
John: Hey, I know this forum with funny stuff. Wanna check it out?
Ben: Sure. *seconds later* LOL that shit be funny.
John: You laugh you lose!
Ben: Damn laughing game. It's fucking cancer.