Wouldn't it make sense for a CFD provider to just take the same...

Wouldn't it make sense for a CFD provider to just take the same position on the real market. That way they can pay for any gains you make but with an appropriate exit plan they keep what you loose.

For example, lets say I go long with 1 CFD contract at 6000 on SPI. CFD provider also goes long at 6000. If it goes up, the CFD provider earns the amount required to pay you. If it goes down all they need is a stop inside yours and they keep what you loose.

So let's say they have a stop at 5999, they loose 25 bucks. You exit at 5990 thus loosing 10 points (250 bucks). You pay them 9 points, covering their 1 point loss and giving them 8 points profit. If they are offering larger spreads than the market then this is easy to do. That's without taking commissions and stop hunting into account. By offering relaxed margin requirements they can amplify their gains because small traders can place bigger bets.

Basically they can't loose, either they take money out of the market to pay you or you pay them.