Grillo was a hopeless and reckless gambler.
He was in debt to both Coonan and DeMeo and infact at one mob poker night, Dom Montiglio actually ripped up a $50,000 debt that Danny had ran up that night.
(Dom was attempting to help Danny).
DeMeo finally had enough of Grillo's debt and his inability to pay it back and so Danny fell victim to the infamous Gemini method!