It is a carnival, with an entrance with a sign reading the carnival's name in purple and yellow lettering. There are multiple rides in the carnival.
Rides and attractions
Spinning Steering Wheels - A teacup-like ride
A roller coaster
Milk Jug Topple
Role in episode
SpongeBob and Patrick come here after having gotten ice cream at Super Weenie Hut Jr's. However, due the wringer being glued to SpongeBob's body, he cannot join in on any fun at the carnival. After seeing him being unfairly used as a bike rack, Patrick sympathetically allows SpongeBob to have fun with him.
However, after being flung out of a teacup ride and given a black eye from a missed target in a ball toss game, SpongeBob berates Patrick in the middle of the carnival for his negligence and catches the attention of many bystanders who take Patrick's side ironically and shift the blame to SpongeBob. Also, before this, Patrick buys cotton candy and gets a winner's badge pinned to his skin from the ball toss.
Although it is a carnival, it is permanent, as stated on a sign near the entrance.