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The five men came at midnight. “The police are here,” Jiang Ling told her husband, Jeff Sikemma, rousting him from bed in their Shanghai apartment.

For the next few hours, Mr. Sikemma said he watched as the plainclothes Chinese authorities questioned his wife about her activities with Australian gambling company Crown Resorts Ltd. CWN 1.70 %

Then they took her away.

“I asked if they had a card or some way for me to get in touch with them,” Mr. Sikemma recalled Tuesday. “They said, ‘Don’t worry, if we need to get a hold of you, we’ll contact you.’ It was a bit ominous. They took her phone, laptop, iPad and a couple of hard drives.”

That was the last Mr. Sikemma saw of Ms. Jiang, who was among 18 Crown employees, including three Australian citizens, taken into custody late last week as part of what Chinese authorities say is an investigation into gambling-related crimes.

The arrests underscore the risks inherent in foreign companies trying to recruit high-rollers from China, where gambling is illegal—and where the government crackdown on corruption and money leaving the country has added new levels of difficulty for overseas casinos. As such, the arrests have sent a chilling effect through the industry.

“We believe that these arrests could…be related to the Chinese government’s wider focus on controlling capital outflows from the country and its anticorruption campaign,” Bank of America Merrill Lynch analysts said in a research note. “The events of the weekend could impact the broader VIP market in Australia.”

Australia’s foreign minister, Julie Bishop, said late Tuesday that consular officials had met with two of the three detained Australians and had requested access to the third.

Australia’s government hasn’t discussed publicly the reasons for the detentions, and Crown hasn’t detailed the allegations made against its employees.

“Our number one priority is to be able to make contact and to ensure they are all safe,” James Packer, Crown’s largest shareholder, said in an emailed statement.

China has become the key feeder market for casinos in Australia, Macau, the Philippines, South Korea and even faraway Las Vegas. But casino companies have to walk a fine line in attracting these customers, because advertising casinos or organizing a group of more than 10 Chinese nationals to visit casinos overseas is a crime under Chinese law, although operators can promote tourism to their resorts.

For a time, casino operators relied on so-called junket operators to attract business and collect debt from mainland China. But with a crackdown on junket operators in recent years, casinos have been forced to revert to using their own executives to develop relationships.

Ben Lee, a marketing consultant in Macau, said many of the large casino companies send people in and out of mainland China every few months.

“You can’t grow your business without sending people to liaise directly with customers,” Mr. Lee said.

Among the people being questioned in the latest arrests is Jason O’Connor, head of Crown’s VIP International team, which is responsible for bringing gamblers who wager large amounts of money to Crown’s resorts in Australia. The VIP business accounted for nearly one-third of Crown’s operating revenue in the previous fiscal year, according to regulatory filings.

There was no response at Mr. O’Connor’s house in the Melbourne suburb of McKinnon on Tuesday. A neighbor, who declined to give his full name, described Mr. O’Connor as “one of the nicest blokes you’d want to meet.”

For casino marketing executives overseas, “the big part of your job is basically to go to countries like China, Indonesia, Taiwan, Thailand to wine and dine your high-end players,” said Sudhir Kalé, founder of GamePlan Consultants, adding that he has done work for Crown in the past.

He said Crown’s activities in China didn’t appear unusual, “it’s just that every now and then the government chooses to make an example out of somebody.”

Crown has experienced a surge in Chinese visitors to its Australian resorts in recent times, offsetting lower revenue from its operations in the gambling enclave of Macau, a special administrative region of China.

Mr. Packer has also been planning a new casino in Australia’s biggest city, Sydney, to attract more high-roller gamblers from China and other parts of Asia. Lawmakers approved the proposal partly because of Mr. Packer’s promise the casino would lift the city’s after-hours appeal to wealthy visitors.

Mr. Sikemma, a U.S. citizen, said Crown has retained legal counsel in Shanghai for his wife and other employees.

He said Ms. Jiang did administrative support work for Crown, including helping Chinese customers gain entry visas to Australia. He said neither he nor his wife initially realized the gravity of her situation. After the arrest, he received a registered letter notifying him of her detention.

After Ms. Jiang was taken away, “We both assumed she’d be back before I woke up,” Mr. Sikemma said. “She processes paperwork. She does visa stuff. Who cares? She’s not doing anything illegal.”

Shanghai police haven’t issued a statement and didn’t answer telephone calls seeking comment Tuesday.

—Alexandra Berzon in Los Angeles, Robb M. Stewart in Melbourne and Ese Erheriene in Hong Kong contributed to this article.

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