Lou had a briefcase with a large sum of money in the trunk of his car, presumably taken from the people who fell for his con act.
Biff was repeatedly trying to get his grandmother, Gertrude Tannen, to bet for him since he was underage. However, when Gertrude finally listened to him and won, she kept the earnings for herself. Lou noticed that Biff used a book to select the winners, and wanted to get a look at Biff's methods himself.
He told Biff that they could earn money together, as he would be able to make the bets while Biff could not. Biff reluctantly agreed when Lou told him to wait for him in the parking lot. While Biff was waiting, Lou killed Gertrude, and put her in the back of his car to bury her. He told Biff that he had talked to his grandmother and said she was still playing the slot machines.
Lou stole the Grays Sports Almanac from Biff, and when he realized that it was the book that stated the winners, and not any methods that Biff had employed himself, he planned to kill Biff and bury him next to his grandmother. However, when he went to hit Biff with a tire iron, Biff caught it and killed him instead.
Shocked at his first murder, Biff justified it in his mind based on the fact that Lou had killed his grandmother. He buried Lou, and took all of the money that was in his briefcase. With the money, he covered up the murder of Gertrude by paying to have a death certificate forged that stated she died of natural causes.
While Biff's killing of Lou was in self-defense, this act would later make Biff less adverse to taking human life.