From the Super Mario Wiki
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The Hole, sometimes referred to as the Cup, is the most important part of the Mario Golf series. In order to complete a course, the player must sink the golf ball in the Hole at the end of the course. The Hole is located on the Green. The Pin is also located in the Hole, as a sort of signal as to where the Hole is.
In Mario Golf: Toadstool Tour, a hole can sometimes release special particle effects, especially if golfers successfully putt from a certain distance and scores under Par.