The agency won the business after a final shoot-out against Bartle Bogle Hegarty.
The incumbent on the account was Karmarama, which declined to repitch. The agency won the business in September 2008. Paddy Power had previously used a variety of shops, including Cawley Nea\TBWA.
The agency's first brief will be to promote Paddy Power's Money Back Specials, under which some customers have their money returned if they don't win.
The campaign will consist of three humorous TV executions, backed by online activity, all starring the Irish comedian Brendan Dempsey. They will be based on consoling customers during the "wish I'd not bet on that" moments following a loss.
The ads will first air over the weekend before the Carling Cup final. They will then return to screens in the days running up to the Cheltenham Festival, Champions League games and the 2010 World Cup in South Africa.
Adam Perrin, the head of brand at Paddy Power, said: "Big Al's has developed a creative idea that epitomises the Paddy Power brand and uses our 'money-back specials' at its core. We're delighted with the relationship and the new campaign."