This really is a strange situation.
I don't get why the kid doesn't stand up to the guy and ask him what's his deal. If I remember correctly, there are plenty of other ways to make someone feel embarrassed, ashamed, upset. Whatever the bet was, why a blowjob became the "prize" is in itself something to investigate further. Was there sexual innuendo to the bet prior? Did you question him on his goods? And why on earth would he want bbjj to do it when I'm sure, if he's as studly as he lets on, he can get his knob slobbered elsewhere.
The guy has enough agency in the situation, as Benderten indicated, to refuse the offer. He can say no, and he should if he feels really uncomfortable about this.
But you know, wiseass that I am, I'd take the opportunity to turn the power dynamics around on the guy. If he suggested the prize to be a blowjob, then ask him why on earth did he indirectly proposition you that way? Consider the bet. What I mean is, if Dantesco bet me to a constant of strength and whoever lost would have to give a blowjob, I'd think before agreeing -- how's this a fair contest? In short, if the guy stacked the odds in his favor -- yeah, you're dumb for falling for it -- but it's worth wondering the ulterior motive. Did he stage a bet you're sure to lose because he wanted a blowjob from you but didn't have the balls to bring it up directly?
At your age, you could get away with, "What's your deal, man? Why do you want some dude to suck you off? Are you gay or somethin'?"
Mind you, I don't normally advocate being rude like that. (Psssht, who am I kidding?) Honestly, and for future reference, honor any and all bets that are reasonable to you. If I owe a buddy a beer 'cause I lost, I can pay up -- that's not a problem. If the penalty were standing in the middle of a stampeding cow herd, no thanks.