The Karaoke Bar was located on C Deck of the JMC mining spaceship Red Dwarf. The crew could go here to do Karaoke.
The original Red Dwarf did not have the Karaoke Bar installed as intended, since the JMC had made budgetary cut-backs, although it did have a Mess Hall and a Disco.
However, when the ship was recreated by the nanobots in Deep Space three million years later, the Karaoke Bar was one of the most important additions to the new ship - as noted by Captain Hollister - as well as ship-wide bio-organic wiring and a quark-level Matter matter/Anti-matter generator. (Back in the Red, Series VIII)