Hey!
Like any other magic pin, to use it you click the chair inventory button and double click the pin to wear it. Then double click the wand button on the right side of your toolbar and immediately start walking around the room. You cannot use the pin in mini game lobbies.
You need to keep walking until you get a pop up message. It will either say that you didn't find anything or it will tell you what you've won.
I don't believe anyone has made a list of the prizes yet. I've used a good handful and some that I've won include:
barrel seats green
a churro chart
magenta Davy Jones organ
yellow teacup
gold Disneyland turnstile (rarer)
Statistically speaking I do not have any knowledge of the chances of winning. I think I've used 10 pins or so and only lost on 2. Hope this helps