The arrests came in the municipality of Chongqing, where authorities have since last year carried out a major mafia crackdown that has exposed a thriving underworld in the mega-city of 30 million people.
Those arrested included Peng Zhimin, 47, owner of Qinglong Property Development Co, which in turn owned the Chongqing Hilton Hotel, official Xinhua news agency said in a report late Friday.
Peng was arrested on organised crime, prostitution, bribery, intentional injury, and other charges, it said, quoting local police.
It said the former director and vice director of a district-level agriculture, forestry and water resources bureau also were detained for allegedly sheltering the gang.
The hotel was shut down in late June over the prostitution and organised crime allegations.
The Hilton International Hotel Group, which manages the business in a joint venture with the property company, said at the time it was fully cooperating with the investigation.
Reports last month had said 22 people were arrested.
Peng ran a club in the hotel where prostitution, drug abuse, gambling and gang activities were carried out, Xinhua quoted police as saying.
He also is charged with seeking protection from officials by bribing them with money and sex, it added.
It said Peng had built a fortune selling fake cigarettes and in real estate. He served a previous jail term for theft.
The Chongqing crime crackdown has resulted in more than 3,300 detentions and hundreds of prosecutions, including the trials of nearly 100 officials.
China earlier this month executed Wen Qiang, a former top Chongqing police and justice official at the centre of the scandal. He had been convicted on charges including rape and taking bribes to protect criminal gangs.