It does and it does not exist.

When I say it does it's in a picture far larger than just here and now. If we talk Karma, than we talk past lives and that is inevitable. Because the very term Karma is about passing energy (that will bring "good" or "bad" events into existence) from point A to point B, and point A can be now, and point B in your next life, or, point A was in past life and point B is now. It's much more complexed than just: if I do good then good will come, if I do bad - bad will come to be. Time, per se does not exist when we talk Karma cause Karma is attribute of the soul which is immortal and unbound in time and space, and the body is a tool trough which soul experiences.
So, you can believe Karma, or not believe, and I find both stupid. (that is just my opinion) You either experience it, understand it, figure it, and be free of it or you don't. The spiritual disciplines call for experience not for dogmatic beliefs.For instance, if your religious beliefs bound you to religion like Christianity, and there you have only one life, one chance and no second shot, than you can't possibly think or discuss Karma cause you don't support reincarnation. The thing about "what goes around comes around" is bound to the punisher God there: you are bad - He teaches you a lesson through suffering, you are good - He rewards you (in the afterlife), and everything about the temptations fit in this image (very roughly put).
And Karma has nothing to do with rewards or penalties: it is perceived as an flow energy, not necessarily labeled as good or bad, but that has a lot to do with with Karma not existing, and the concept of "truth will set you free".