The poster, which recreated Leonardo da Vinci's painting "The Last Supper" with apostles taking bets on cards and roulette and Jesus sitting next to a haul of gaming chips, was deemed to break the ASA's taste and decency codes.
Paddy Power said they were an Irish company and had got a positive response after road-testing the poster on their employees, many of whom are devout Catholics.
The poster's strapline had read "There's a place for fun and games". The ASA ruled that "the representation of the Last Supper as a casino, with the familiar Christian imagery replaced with items used for gambling, could cause serious offence".
The advert, from a campaign which has already finished, was ordered not to be repeated.
It is not the first time that Paddy Power have courted controversy with their handling of religious matters. Last year they attracted the Vatican's displeasure by taking bets on who would win the Papal conclave that elected Pope Benedict XVI.