Guo Meiling, who stepped into the public eye after flaunting her wealth online three years ago, was detained by Beijing police for illegally gambling on World Cup matches.
Guo, also known as Guo Meimei, admitted to police she had taken part in gambling.
Eight other people were held in the operation, police said on Weibo.
The ring accepted bets on the mainland over the telephone or mobile messaging apps, and placed the bets with overseas betting websites, they said
The police made the announcement after The Mirror, a Beijing newspaper, reported on its website that Guo had been held, quoting an unnamed source.
Calls made to Guo’s mobile phone went unanswered on Thursday afternoon.
The 23-year-old came into the spotlight in 2011 after claiming – later found falsely – on her microblog to be “commercial general manager” of the Red Cross Society of China, the mainland’s largest charity organisation.
But the way she showed off her luxury cars and designer handbags led many people to question how a young woman working for a charity could be so wealthy. Her bragging also triggered speculation over how charitable donations were spent, which had an effect on the credibility of the sector.
In the same year, an investigation found no connection between Guo and the Red Cross, but it shed light on rampant fund mismanagement within the organisation. Donations to mainland charities fell by one-fifth after the scandal.