It is true. President Harding’s poker games were frequently played at the White House with a group referred to as the “Poker Cabinet”. The Poker Cabinet included Harding’s friends, as well as Secretary of War John W. Weeks, Attorney General Harry M. Daugherty, and Interior Secretary Albert B. Fall (the mastermind and focal point of the Teapot Dome scandal).
Harding’s poker games at the White House also featured something very welcome to the President’s guests — and completely illegal. Despite the fact he led a nation under Prohibition, President Harding had a healthy stock of bootleg liquor that was enjoyed by his Poker Cabinet.
As for what Harding gambled away, it was a set of White House china from Benjamin Harrison’s Administration that Harding lost in a game with his Poker Cabinet.
Here’s a couple of sources for the poker story:
•William A. DeGregorio, The Complete Book of U.S. Presidents, New York: Random House, 2002, p. 433
•Cormac O’Brien, Secret Lives of the U.S. Presidents, Philadelphia: Quirk Books, 2004, p. 165