The world's largest cruise ship, the "Freedom of the Seas," before a one-night cruise.

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The High Seas: Breaking Loose

From the 1950s to 1990, a cruise ship flying a U.S. flag had no gambling onboard. U.S. law applied -- end of story. Of course, the law changed after the gambling ban left only three U.S.-registered ships.

The Cruise Ship Competitiveness Act of 1991 made it legal for a U.S.-registered cruise ship to offer gambling once it made it to international waters. Since then, the U.S. cruise industry has been thriving. Aside from gambling, cruise ships offer alcohol included in the price of an adult ticket, with only the cruise ship determining whether someone should be cut off. And considering no one onboard is going to be driving home, few people are cut off. (This, along with scalable railings, might account for a few of those 28 cruise-ship disappearances in the last five years).

This legal leniency could extend beyond gambling. Technically, a cruise ship registered in the Netherlands, where prostitution is legal, could offer prostitution services while the ship was on the high seas (although Holland America doesn't do that). And a cruise ship registered in Amsterdam, where marijuana use is legal, could allow passengers to smoke pot onboard when it's in international waters -- although it would run the risk of illegal smuggling between countries.

Ships aren't just for vacations, though, and breaking loose doesn't just apply to recreational activities. A U.S. company called SeaCode plans to take full advantage of maritime law in its "hybrid outsourcing" business plan. Established in 2005, SeaCode has an innovative idea that stems from recent changes in immigration law (called H1-B) that make it much more difficult to get work visas for foreign skilled workers, most notably computer programmers out of India. What's SeaCode's plan? Buy a used cruise ship, register it in the Bahamas (where there are no H1-B visa laws), park it off the U.S. coast and put hundreds of programmers onboard full-time. SeaCode can house as many Indian programmers as they can fit in the ship (which is 600, according to the founders) and skip the U.S. visa process altogether. Labor laws are an exception within territorial waters. If the ship is registered in the Bahamas, U.S. labor laws don't apply. SeaCode will be operating under Bahaman labor laws three miles off the coast of California.

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