Luck's power is certainly one of mystery, karma is part of how he uses his powers of Luck. He makes the decisions of whether or not one gets their desired 'luck' per say.
It's actually quite a simple scheme to Luck's 'bad' powers. Simply, if one desires to have Good Luck, yet, does not perform good tasks, he/she will not be granted said Luck, yet instead get Bad Luck.
Vice versa for Good Luck, if one does good things, then they shall get the desired Good Luck, yet in turn, if they do bad things, they get Bad Luck.
As it was stated earlier, Luck is the most widely known Secret, as he travels the universe practically all the time. Due to this he knows many other characters. Early on in his life, a little while after the creation of the universe, he, along with Order, came across Temeres, a Terral who lives on the planet Terralius, home planet to widely known Arbiter, and befriended him, eventually resulting in Temeres' downfall, as Temeres became power hungry, Luck aided Order in sealing the psychotic Terral away.
Even after this, Luck continued on with his search for friendship across the universe he helped in creating, eventually, along with the other six Secrets, became enslaved by Control, who used Luck as the Destroyer of Planets. Many heroes and villains banded in defeating Control, and when Control was defeated, Luck was freed.
Even to this day, Luck continues on his search for friendship and to discover new things in the universe.