Aug. 20, 2009 -- In this tough economy, at least one industry is booming: "sugar daddy" dating Web sites.
Erin Miller, a 23-year-old, self-described model/actress, uses a dating Web site called SeekingArrangement.com. On her profile, she has advertised herself as looking for a "playful, open relationship with financial benefits."
"I'm dating four sugar daddies right now," she said.
She and thousands of other women have found their "sugar daddies" on SeekingArrangement.com, which, in many ways, resembles a traditional dating Web site.
Women can join for free. They post pictures and describe themselves to prospective dates. But there's an important difference: The women also write how much money they expect in return for dating the men. In Miller's case, she leaves the amount negotiable, but some "sugar babies" ask for as much as $30,000 a month.
Miller has only been on the Web site for a couple of months, yet she feels as though her life has already changed drastically.
"I've been shopping all over, nice cars. I got a new condo," she said. "Every day is a new adventure."
One of her sugar daddies lets her use his yacht. He also sends her a Rolls Royce and a chauffeur to take her shopping. Another date pays for her condo, and another gave her a Mercedes.
"Money helps tremendously with happiness, because I would not be happy dating a guy who lived at home in his parents' basement," she confessed.
How does a sugar baby like Miller get to know her dates?
"The dates usually start off with some coffee or a drink somewhere, and then you get to know each other, to see if you're feeling the vibe," she said. "And then go on a second date and start talking about your rent. And they'll ask you how much money you need and what's your budget."
In return, Miller said, "the guys get a hot chick -- arm candy that can make them look good and [that they can] have fun with."
Ady Gil, a 50-year-old entrepreneur, claims he's worth between $10 million and $50 million. He owns two large production companies in Los Angeles. He believes the arrangement site is a great way to meet women.
"You can make a deal with the girl. You don't have to worry about whether it's going to be 'yes' or 'no,'" he said. "You don't have to take them to dinner and hope that maybe something will happen. The cards are on the table."
Men pay $45 for membership on the Web site, but some, like Gil, pay an extra $1,000 to have the site verify his wealth and put his profile in a prominent spot.
Web Site Creator: 'I Wasn't Very Good at the Social Scene'
Gil is far from unattractive and could certainly find women without paying. So why does he do it?
"Because most of them are drop-dead gorgeous," he explained. "First, a lot of them are very intelligent and are not the regular girls. The Match.com women are boring.
"The other thing is you want to buy the age gap," he added.
So, unlike the standard dating sites, this Web site provides older men like Gil a chance to find younger women by advertising their wealth.
"If you go to most of these [dating] Web sites, the girls say, 'I'd like to find someone between 25 and 35.' Well, I don't fall into this category anymore," he said. "But when they come and meet me and they go out with me, they say, 'Wait a second, he's 50 years old but he's a whole lot more fun than the 35-year-old man.'"
The Web site works so well for Gil that he said he has to shut his profile down Monday through Friday because of the thousands of e-mail responses he receives.
Entrepreneur and MIT graduate Brandon Wade, a former Microsoft and GE executive, created Seeking Arrangement three years ago. It's an odd business for someone with such a buttoned-up background.
"The inspiration came partially because I was at MIT," he said. "I was very much a nerd and a geek. I wasn't very good at the social scene. I was on regular dating Web sites. I would write messages to beautiful women and I would not hear a response, and I understand why."
Over time, Wade figured out what could allow him to stand apart from the other men on those dating Web sites: His money.
"It would be silly to say, you know, money is not important in society," he said.
Sugar daddies get more than just sex: Many get makeovers, Wade explained. His wife, who he calls a "sugar baby," transformed him into the man he is today.
"I was wearing those Harry Potter glasses and women would not give me any time of day," he said. "But I met my wife, who is 13 years younger than me. She likes to pick stuff out for me. My transformation is one of the benefits that sugar daddies get from a relationship such as this."
Today, nearly 3 million women advertise on this and other sugar daddy dating Web sites. Some ask their sugar daddies for Prada and Gucci bags, fabulous vacations, and even breast implants. Others just ask for help with basics like money for tuition or rent.
Sugar Daddies, Babies Happy; Critics Say It's Still Prostitution
Natalie Caplis, a single mother from Montana, was struggling to make ends meet until she made an arrangement that changed her life.
"For me, getting on this site wasn't about getting a $500 pair of shoes or living this lavish lifestyle. It was really about just feeling secure with my basic needs," she explained. "I just, for one time, got to breathe. I got to spend time with my son without having to worry about am I going to have the rent paid?"
One sugar daddy helped her get into a better apartment. He also purchased a brand new car for Caplis and her son to use.
Why are the sugar daddies so willing to give?
"You know how many women need help?" asked Gil. "I'm not giving a handout. I'm getting something. I've seen women there that actually came out of a magazine. The girl who works for me, you can take her out of a magazine."
After meeting one woman through Seeking Arrangement, Gil decided to help her out and hire her as his receptionist. He hired another sugar baby to be his personal "entertainment coordinator" for a month.
As part of their arrangement, Gil told her, "For the next month, you're going to make sure that I have a good life. You make some dinner reservations. We'll go out, we'll roll in the sheets."
Web sites like Seeking Arrangement do offer perks for older, wealthier, and sometimes married men to get into no-strings-attached arrangements with women.
However, this has its share of risks.
Multimillionaire Stephen Dent, an heir to the DuPont fortune, advertised himself as a sugar daddy on SeekingArrangement.com. He got several dates and then was blackmailed to keep his arrangement a secret from his wife. Police stopped the blackmailer, but Dent continued to use the website until more blackmail attempts began. In total, four people have been charged with trying to extort dent out of more than $100,000. Three of them have been convicted.
"You expect that when you have a Web site where you have lots of beautiful women and lots of rich men gathering," said Wade. "At the end of the day, you know, dating is a risky thing on the Internet, so precautions need to be taken."
Former prosecutor Wendy Murphy said that although the sugar daddy Web sites are legal, if money is exchanged for sex, then that's a crime.
"I don't know how you can call it anything but prostitution," she said.
Self-described "sugar baby" Miller disagreed.
"If someone wants to help me out financially, it's nobody else's business," she said.
Sexual advertising is hardly a secret these days. One only has to take a look at Craigslist's "adult services" classifieds section to see that. Even in the Yellow Pages, there are 20 pages of "escort" and "massage" services.
If this is illegal, then why is it out in the open like this? And why don't we hear about more prosecutions?
"It's a crime that not a lot of people care about," Murphy said. "[It] doesn't mean we should give up and just let it happen."
She argued that if everyone were to start robbing banks tomorrow, we wouldn't give up trying to prosecute those crimes.
But robbing banks steals from others. This behavior is different.
CEO: 'Just Because a Guy Gives a Woman Money and Sleeps With Her Doesn't Necessarily Mean It Is Prostitution'
As far as the SeekingArrangement.com CEO is concerned, his site doesn't allow prostitutes.
"I draw a very clear line between what is prostitution and what isn't," Wade said.
So then, what is the difference?
"Just because a guy gives a woman money and sleeps with her doesn't necessarily mean it is prostitution," he said.
Gil agrees. He sees contradictions in what society deems to be prostitution.
"In 1955, my father made an arrangement with my mother," Gil said. "He put a ring on her finger and he said, 'I'm going to support you for the rest of your life.' So my father made an arrangement with my mother. If you make an arrangement for an hour, it's sleazy. But an arrangement for 50 years is OK. So, is it a time factor?"
But it's hard to deny that an arrangement for an hour is inherently sleazier than a marriage, right?
"An hour may seem sleazy," he said. "But when you take it a little bit farther into a day, a week, a month, then it appears to be a little better, I guess. You could call it prostitution or anything you want to, but I don't. Prostitution is just an ugly word for it."
"The concept that you trade your intimate sexual self for money is prostitution, if not slavery," Murphy said. "It's not a clear case the way slavery was, but it's darn close because of what's being sold: access to the intimate self."
However, Caplis, the single mother who said Seeking Arrangement improved her life, pointed out that sex is not always a part of the arrangement. One man she met through the Web site bought her a car, but they never had sex. They only talked on the phone and were never together in person.
"Never," she said. "And that is also the part that is hard for people to believe. That's why it's such a miracle. How could you possibly imagine that would happen?"
If not for sexual favors or physical companionship, why then would he give her all those gifts?
"I'm sure that he felt satisfied knowing that he was taking care of somebody that was true and honest and that really needed help," she said.
Her sugar daddy may have been satisfied, but that's clearly not what most men on the Web site are looking for.
"One of the things that make men happy is sex," Gil said. "I'll put it out there. It does. It makes men happy, you know?"
He likes to think that the women, once they get to know him, are not just in it for the money.
Miller seemed to suggest otherwise.
"I'm not a slut or a prostitute, like people might say," she said. "But if one of my sugar daddies ran out of money, I probably wouldn't talk to him anymore."