PT doesn't support Loot Masters, so if your not used to the term here's what they do:-
Loot Master is either the Party Leader, or allocated by the Party Leader. Party Leader is usually the first person to invite another to the party, unless they appoint someone else PL, and that other person accepts the appointment.
Once a party member has accepted LM they are able to chose a minimum quality of item to manage control of. PT doesn't support item quality aside from age or mix either, so I'll explain that too. Most RPGs have
- Trash
detritus, 1 old boot, mouldy bread, a severed hand, half digested meat etc. - Common
potions, cash, summer chicken, non-spec items etc. - Uncommon
spec items - Rare
near perf-spec items - Epic
perfect spec items - and possibly even Legendary or Unique items
above perfect stats or maybe something like "pre-aged", Kelvesu Amulet would definitely be classed as Unique or Legendary at the rate it drops on official servers 
Anything below the quality specified will drop as normal. But anything at or above that level is highlighted on the LMs display, and nobody can pick it up till the LM has "inspected" it. (PT doesn't usually let you "inspect" items before deciding whether or not to pick them up... but it's pretty essential when you get "trash" drops.

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The LM can then choose whether to give the item to a specific party member, or allow party members to "roll" for the item. The member who rolls highest will receive the item in their inventory. But some members may decide they would rather have the inventory space, or carry weight than win that item, and so they can choose to forfeit the roll.
If everyone forfeits the roll, then the item is left on the floor as if it where not high enough quality for the LM to bother with it, and if that happens a lot, then the LM has probably set the quality too low for this party.
When the LM is going to allocate the item to a party member, it's usually because the item is valuable (to vendor) but only usable by a certain class. You don't want some thieving Pike in your party taking all the high quality Mage and Priestess drops to the Vendor when you are out hunting for kit for your casters. XD
If there are multiple party members who could both use the same item, lets say it's a Prs-Spec Wand, and you have two Prs in the party with a lower spec wand, they can say "Prs: Roll" and the two Priestesses can say "/roll" and the server will produce a random number between 1 and 10, or 1 and 12 (typical AD&D 1D12 roll) the Prs who rolls highest is who the LM will allocate the wand to... but they have the ability to discount any dumb Pike who does a "/roll" because the LM is a human.
Additionally, if it's a Clan party, the LM will probably know if there is a greedy Prs-Spec in the party who will roll on anything whether she needs it or not. (not usually an aspect common to people who play Prs, but some other classes will)
LM generally makes it easier to manage DKPs (Dragon Kill Points, "Dragon" being the most common RPG "unique boss" monster.) in a Clan. Unique dungeon drops which require a Clan to take 20 party members into the dungeon and extinct all enemies in order to spawn the boss and close the dungeon down for a random drop that only falls from that boss, and each Clan may only attempt the dungeon once per week before the dungeon resets are typically allocated to the appropriate class member who bids the most DKPs.
DKPs are not a "game feature" but something players and Clans manage. Each time a player aids the Clan in clearing the dungeon and killing the Boss they gain a DKP. It will probably take many kills over several month by many many players for the Clan to attain a single item that several Clan members seek. Those present on the run on which it drops may then spend those Kill Points on the item in question via bidding. The Clan Leader will keep track of who has earned how many DKPs and subtracting the number "spent" on the glorious drop.
It also aids smaller parties who are not part of the same Clan in trusting each other. The most trusted member will be allocated the role of LM, and ensure that nobody takes more than their fair share. ^_^