I think there's a problem with my clutch

[Riley W]

I recently bought a new Lifan 200cc engine with hopes of swapping it for my old engine on a homemade go kart. So far, I've been very successful and I'm almost ready to drive it. The only problem left is the shifting/clutch. I built a shifter kart-style shifter on the kart and I bought a normal clutch cable, that works fine. The problem comes when I start the engine and put it in any other gear beside neutral, the driveshaft starts to spin at idle and when revving (obviously) My first thought was that the clutch was engaged, but when I looked at the clutch lever, and played with it, nothing happened. The clutch lever is loose and it doesn't feel like it's doing anything. I did buy pennsoil 10-30 4 stroke oil, which I think could be the problem. I just ordered some of this oil, which should be for a wet clutch http://www.amazon.com/gp/aw/d/B00DJ4..._rd_i=15719391

I can send a video of the kart and how the engine is acting if needed.