Francis M. Gagliardi - Page 5




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         and other living costs, before 1996 Mr. Gagliardi generally saved            
         most of his lottery winnings.                                                
         1994:  Mr. Gagliardi and His Wife Divorce                                    
              During 1994, Mr. Gagliardi and his wife divorced.  Pursuant             
         to the property settlement in the divorce decree, Mr. Gagliardi              
         and his ex-wife evenly split the original annual lottery payment.            
         Accordingly, after the divorce, Mr. Gagliardi’s gross annual                 
         lottery payment was $666,500 (gross annual lottery payment).                 
              After Mr. Gagliardi divorced, his two children lived with               
         his ex-wife in Marin County, California.  Pursuant to the divorce            
         decree, he received visitation rights with his children.                     
         Mr. Gagliardi’s Gambling From 1996 Through 1998                              
              In or around 1996, Mr. Gagliardi had a friend who was dying             
         of cancer.  In 1996, Mr. Gagliardi’s friend asked Mr. Gagliardi              
         to be his companion on a trip to one of the casinos owned and                
         operated by California Indian tribes in San Diego County (the                
         casinos).                                                                    
              Mr. Gagliardi gambled infrequently before winning the                   
         lottery.  After the trip with his friend, Mr. Gagliardi started              
         playing the slot machines at the casinos2 frequently and became a            


               2  Some of the casinos that Mr. Gagliardi gambled at                   
          included Sycuan, Viejas, Barona, and Pala.  Sycuan is                       
          approximately 8 to 10 miles from Mr. Gagliardi’s house, Viejas is           
          approximately 20 miles from Mr. Gagliardi’s house, and Barona is            
          approximately 15 miles from Mr. Gagliardi’s house.  He gambled              
          most frequently at Sycuan because it is the casino closest to his           
          house.                                                                      





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