A popular "sugar daddy" dating website that links young women with wealthy older men who pay to meet up with them may break sex work laws, police have warned.

The SeekingArrangement website claims its Australian membership is growing exponentially and that it has 154,537 people signed up.

Sydney woman Ella (not her real name) has a full-time job, is a single mother and is starting a postgraduate university degree.

The 29-year-old has an arrangement with a businessman nearly twice her age and each time they meet he pays her $2,000.

"It's not sex for money, it's an exchange between two adults that have something to give each other, on levels far greater than just sexual," Ella said.

"Intimacy is a very small part of it, for some people it's a be all and end all, but for me personally, it's much more about a mental connection with someone.

"[The first time we met up] he said 'here's a book for you', and I was sort of thrown by the whole idea.

"He said 'make sure you have a read of it later when you get home'.

"When I got home, there was a nice white envelope tucked in with $2,000."

While the website claims it is a dating service, Ella says most men on there are looking for sexual services.

"Ninety-five per cent of them will tell you 'I want to see you three times a week, for an hour each time'.

"Well I'm sorry, you're not looking for a sugar arrangement, you're looking for an escort."

Sorry, this video has expired Experiencing a 'sugar daddy' dating website ( Ashlynne McGhee )

In Victoria escorts must be registered, and in South Australia it is illegal to pay someone for sex.

"These types of websites are of concern because they may breach the law and they may also place people in dangerous situations," South Australia Police said in a statement.

Victoria Police said "websites like this are an emerging trend that Victoria Police is looking at closely in terms of current legislation".

But SeekingArrangement spokeswoman Brook Urick denied the website was used for illegal purposes.

"SeekingArrangement is a dating website," Ms Urick said.

"There's not really an exchange of money for sex or sexual favours, it's really about building a relationship.

"We discourage all escorts and prostitutes from using our site.

"It says that all over the site, on every page there's a disclaimer that explains what prostitution is and why it is illegal."

Australian prostitution laws predate the internet

At least two violent crimes in the United States had been linked to arrangements made on the website.

Alix Tichelman, 27, was charged with killing Google executive Forrest Hayes in November 2013.

It was alleged she met Mr Hayes on SeekingArrangement.

The website also introduced teenage twins Shalaine and Shaina Foster to 85-year-old Paul Aronson.

The twins are in custody for allegedly tying up and robbing the elderly man after a date in New York in October last year.

"In reality, those people could have met anywhere, they just happened to meet on our site," Ms Urick said.

"Our members have the option of getting themselves background verified and showing other members they are who they say they are and that they're not a violent offender."

Much of the state and territory legislation concerning prostitution and escort services pre-dates the internet.

Australian Adult Entertainment Industry spokesman William Albon said the industry wanted the laws updated to include websites like SeekingArrangement.

"The internet is having a massive impact, we're scared of it, we appeal, we cry out for help, we want the government to assist us," Mr Albon said.

"Competition is a good thing when you have a fair, level playing field. This is not a fair level playing field."

Concern around connecting intimacy with money

Relationships Australia's Kylie Dunjey said she had concerns about connecting financial arrangements to intimacy.

"Will it always and forever be understood by both equally that this is strictly a business relationship? Or will one fall in love?" she said.

"Will one start to get their heart engaged in this and then become vulnerable and forget that up front they made this arrangement?

"I think the question to ask is if there was no money involved, would there still be attraction? Would there still be a desire to have a relationship?"

Ella paused to consider when the ABC put this question to her.

"I think so, I do, you know," she said.

"Some women do become dependent on the money.

"I have a full-time job, so for me, it's a nice little bonus to have that financial aspect."