It certainly does sound like he's got a brilliant scam going: he gets someone to set him up with escorts in such a way that the sex worker does not charge him for her services because she hopes to be paid more at a later date. The "I'll pay you ?lots... soon" scam is a common one, also seen in the "I'll pay you thousands for a weekend away but will want a free booking first" form, or the "I'll be your best regular, after you give me a few discounted/free appointments" form, and so on.
I actually heard something really interesting about sugar daddies from 'the other side', as it were, and basically came to the conclusion that 'sugar daddying' these days, what with the abundance of women around who are happy to have a few shags in exchange for a champagne dinner and chauffeured car ride back to the hotel, is mostly a quick and efficient and quite a low-cost way of getting laid without actually doing any of that "paying for it directly" stuff. Sure, they might give gifts, and I'm sure lots of fun is had by all, but from everything I've heard, even in mad old London, nobody gets ?4000+ a month from a single generous guy these days - not before they've put in some SERIOUS legwork, anyhow.
Give me five respectful clients a week who each pay my fee and don't mess me about rather than one irritating, stingy billionaire any day.
If you want to continue this arrangement and see where it goes, for the love of Aphrodite don't go doing anything that you'd mind not being financially compensated for. Only you can read this man's cues (and emails!) and get a gut feeling about whether he's a liar, a cheapskate, an idiot, or a genuine guy just looking for The One.
You definitely need a lot more information and, as you've said yourself, more concrete arrangements (i.e. cash in your hands up-front) before you can continue providing your services here.