The bucket shops sound like prop trading companies of today

There are many modern day bucket shops. Any CFD or "spread betting" product is just your broker taking the other side of your trade (and optionally, offsetting the risk). Prop firm "evaluations" or "accounts" are another popular one on social media.

Basically anything that amounts to a side-bet rather than a trade recorded on an exchange should (IMO) be avoided, and you're putting yourself in a situation where you and your broker have an adversarial relationship.

legal bucket shops is exactly what they are

a market maker (MM) (citadel, optiver) etc makes money in the most part by filtering a trade from customer, and then agreeing or disagreeing with its sentiment. If you buy say msft at $480 and they think it will dip below $480 they will 'hold risk' and wait for it to dip to say $470 then execute your trade, making $10

except instead of aiming to make 2% on a single trade, they aim to make maybe 5 cents this way on a $480 stock, mostly holding for less than a few seconds, on millions of trades an hour

thus, robinhood very valuable because it encouraged retail investors to have high trading volume on complex instruments. that "order flow" then sold to MM like above for fixed rates or % shares.

MM are ultimately a good thing because they provide liquidity. there is always a person willing to take the other side of a trade when you click. if you trade in a boondocks stock market like singapore or new zealand you will quickly see the market run dry and you cant get out of a position

There are still bucket shops, but they call them "binary options brokers" now. If your broker only makes money when you lose money, they're not a broker, they're a casino.