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This term refers to the ambient of a party/social gathering that has evolved (through use of substance and lack of judgment) into a setting for salaciousness and other forms of debauchery.
In George Lucas' (1983) Return of the Jedi, we see that the palace is home to a plethora of deviants from all corners of the galaxy thus promoting indulgences from many different worlds.
"Hey did you go to toms house party last week?"

"Yeah, that joint was like Jabba's palace, I think I may have caught something from one of the girls there." *scratches crotch*
by Edward Specter January 11, 2014
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