I looked this up yesterday cause I was curious too and it is not visible but the way it works is basically by comparing the number of comments/reviews you leave compared to how many your game has. If you leave lots of reviews and your game has few, you will have higher karma. Inversely, if you get lots of reviews and don't leave any then your karma will be lower.
To add to what ndelaplace said. If you weren't aware you can sort submissions based on Most Karma. This can help if you are hoping to find games to review with the view to receiving reciprocal feedback.
