Movies like to present "chess hustlers" as playing chess for a living.
In reality, most of these people are playing chess for fun. The "hustlers" are often just down on their luck financially and like to make some money while still having fun.
There's certainly no J.J. Peachum-type figure who trains chess players to go into parks and make money from innocent passersby.
As for their strength, it's entirely dependent on the city or area you're looking. They're just a collection of chess players, there's no strength range you have to be in. In New York, master-strength players have been known to hang out on the street playing chess. In New Orleans you could catch a world-class player like Jude Acers sitting around in his red beret taking all comers. Where I am, in Cleveland, it seems like the strength level is in the 1000-1800 range, but hey I'm 2050 and I play around there fairly often, and I've known masters and even an IM to join in at various times. The guys who are into gambling are usually among the stronger players in their setting, which is again entirely dependent on where you look. At any rate, gambling isn't as common as the movies like to make it out to be. Having played all over I've only encountered it a few times and usually not from secret masters but rather guys who had learned enough tricks over the years to be able to beat most clueless people and were pretty confident.
It's not a business operation, it's an informal chess club where gambling is a part of the culture.