The story opens off the coast of Ship-Trap Island.
This is one of those stories that really illustrates the importance of setting, because it couldn’t really take place anywhere else. Ship-Trap Island is an isolated Caribbean island that gets plenty of traffic passing by, but none that stops. General Zaroff chooses it because he can create a trap there to stop the ships which provide easy prey for him.
After Rainsford falls off of his ship and swims to the island, he meets its eccentric inhabitant. Zaroff explains to him how he traps the ships, after telling him that he started hunting human beings when animals got boring for him. They are his new "game."
"Watch! Out there!" exclaimed the general, pointing into the night. Rainsford's eyes saw only blackness, and then, as the general pressed a button, far out to sea Rainsford saw the flash of lights.
The general chuckled. "They indicate a channel," he said, "where there's none; giant rocks with razor edges crouch like a sea monster with wide-open jaws ...
The ships get trapped because they think it is safe, and then it turns out that there are actually very sharp rocks there. Zaroff has turned the lights that are supposed to guide ships into a system to trap them. There should be something warning them away.
Since he is on an island, no one knows what Zaroff is doing. Rainsford realizes that his host has been hunting people for a long time, and doesn't see anything wrong in what he is doing. He has fully embraced Ship-Trap Island's image and reputation. It makes the sailors nervous because sailors are superstitious, not because they know the truth about what happens there, but in this case they have a need to be nervous. You do not want to get your ship trapped on that island.