Embarrassingly, I always though bucket shops meant something else. (I thought that this is what you call brokers with heavy flow that could cross much of their traffic internally without going to the exchange.)
The business model, at least in the 1920's, was to get customers to take big positions on margin, then to manipulate the actual stock (on an actual exchange) to the point that customers were wiped out. If the manipulation cost less than what the customers put up, the bucket shop would win.
People occasionally accuse forex companies of doing something similar, but the market is probably too deep for any retail-facing forex company to successfully manipulate prices like this.
Reminisces of a Stock Market Operator talks about bucket shops--and trading against them--in detail.
What you describe here sounds like dark pools[1].