Market maker
A market maker constantly quotes a buy price and a sell price and takes the other side of its clients' orders.
In markets generally, a market maker supplies liquidity by quoting both sides and earns the spread. At retail brokers, the market maker model means the broker itself takes the other side of your trade internally, then may or may not hedge its overall exposure.
This model is not a scam in itself: it allows fixed spreads and commission-free execution. It does, however, create a potential conflict of interest, since your losses can be its gains.
That is why regulation matters: a market maker authorised by the FCA, ASIC or an EU regulator must follow rules on best execution, segregation of client funds and price transparency.
See also