EMBATTLED Macau gambling operator Suncity Group ceased its junket operations as of Friday, according to people familiar with the matter, following the arrest of its founder amid Beijing’s ongoing crackdown on the casino hub.

Sun City Gaming Promotion Company Ltd., Suncity’s junket business arm, said it can’t operate because partnerships with other casinos were halted, and company systems were suspended due to legal proceedings, according to an internal notice seen by Bloomberg News.

Suncity employees were notified late on Friday and no follow-up arrangement has been announced, said the people, who asked not to be identified because the information is private. Employees have yet to receive November salaries because company systems and accounts are frozen under the investigation, the people said.

A representative for Suncity didn’t immediately respond to a request for comment outside of normal business hours.

Alvin Chau, who controls Suncity Group, was arrested late last month on allegations of establishing overseas gambling platforms and carrying out illegal virtual betting activities. Suncity has since closed all of its VIP gaming rooms in Macau’s casinos, and was said to have told some staff it will stop paying them amid concerns over cash flow.

Suncity’s travails have rocked the world’s biggest gambling hub, already reeling as the government intensified regulatory oversight. Some casinos, including Wynn Macau Ltd. and Melco Resorts & Entertainment Ltd., decided to close VIP gambling rooms run by junkets given the scrutiny on Suncity, Bloomberg News reported earlier.

Junkets, which have been in the cross-hairs of Beijing’s crackdown for allegedly facilitating money laundering, account for some 75% of Macau’s roughly $3 billion in annual VIP gaming revenue. They provide a service that is part upscale travel agent and part money changer for big spenders in Macau.

Shares of Suncity Group’s listed arm, which doesn’t include its junket operation, were halted on Thursday and will resume trading on Monday. They have plunged 46% since Nov. 30. Mr. Chau resigned on Dec. 1 from his posts as chairman of the board of Suncity Group and as an executive director. — Bloomberg