Its simulated. The opposing gangs are given so many businesses, brothels and cash up front. Each turn they gain so much cash and they have a chance of attacking you or another opponent. The chance of you being attacked is low. If you are attacked any gang you have doing guard duty fights against the attacking gang. If they win the usual result is a loss of businesses. There is also a separate event where customers can attack a girl and your guards get involved which can result in the gang being damaged but not your businesses or the brothel.
All in all you need to make sure you have at least one gang with a high intelligence and full members guarding your brothel, but more than one guard doesn't seem to make the brothel significantly safer.