Players take turns "panning" for gold - they draw three wooden marbles out of the bag and drop them into the pan. Carefully, you try to get the non-gold marbles (grey and black) to fall out of the pan without losing any gold marbles. It's a skill that takes some practice... OK, a lot of practice.
Meanwhile, the other players are betting on the results, predicting how much gold you'll have left when all the non-gold marbles are gone. The payoff system is simple - if they're right, you owe them gold; if they're wrong, you get their wager.
There's also a raccoon that goes to the player who last picked a grey marble out of the bag - they get a tax of one gold when a player draws three gold marbles. As well, there is a second variation on the rules that mainly changes the limits on betting.
Extra Wads of Fun
While the game works (after a fashion) with two players, it's really better with three and best with four. The age recommendation here is pretty solid as well, since the coordination needed to pan successfully doesn't happen much before age 6.
By the way, the rope circle is to keep the marbles from rolling all over the place, not so siblings can strangle each other at the end of the game.