Scientific Games, a dominant player in the US instant lottery ticket market, is jockeying for a larger stake in Europe after buying a British maker of betting terminals last month.
"The traditional lotto market has matured in Europe," the chief executive of Scientific Games, Lorne Weill, said.
Growth needed to come from other product areas, such as instant "scratch" tickets and video lottery terminals.
Instant lottery tickets are a high-growth market. In Italy, annual sales of instant lottery tickets have mushroomed from $250-300 million a few years ago to $4 billion today. US sales have grown at a compound annual rate of 16 percent over the past six years to about $25 billion today.
Germany and Spain are expected to be high-growth markets for scratch tickets.
Mr. Weill also predicted that lotteries and betting would become available on mobile phones in Europe within a decade.
In addition to instant lottery tickets, Scientific Games is betting heavily on video lottery terminals, electronic games played on a video screen that simulate casino games or spinning-reel poker machines. Unlike poker machines, the machines dispense a redeemable ticket not cash.
There are fewer than 25,000 video lottery terminals machines in Europe, but Mr. Weill estimated that their numbers would swell to 250,000 to 500,000 in Western Europe in the next two to five years.
Driving the expected increase is "server-based gaming", or technology that connects video lottery terminals, poker machines or other gaming equipment to a central network.
Server-based games allow owners to instantly change and customize games for different markets or times, and adjust betting denominations, whereas such changes must be made manually on conventional machines.