Economically it behaves like a cfd: leveraged, cash-settled, long or short, with the firm as counterparty. The difference is in the packaging. Instead of a quantity of contracts you choose a stake per point, and instead of a contract note you have a bet, which is why the accounts are offered by firms licensed for it and generally only to residents of the UK and Ireland.
Pricing is usually all-in, with the firm's charge built into a wider quote rather than taken as commission, so comparing a spread bet against a raw-spread-account means comparing the total cost, not the headline spread.
Bets can be daily funded, which rolls with an overnight charge like a CFD, or quarterly, where the financing is built into a wider quoted price and no nightly charge appears.
Example: a stake of GBP 5 per point on a market at 7,800 moving to 7,850 returns 50 x 5 = GBP 250. The same directional result as 5 index CFDs at GBP 1 per point.
Related: cfd, spread-betting-tax-uk, overnight-financing-charge, index-cfd