How come illegal websites are allowed to exist?

I am working on a paper here at my local university and the topic is basically asking me , "How come illegal websites are allowed to exist?". i am honestly curious even without the topic. Some website such as unescape state in the terms and conditions that their service is not allowed to be used for commercial use, but website sell unescape gold and virtual stuff. I am curious how come they are allowed to get away with it? Can anyone make a terms and conditions? Is it free? What are they doing that allow them to function daily? And lastly, are these websites operating legally?