The ad featured an actual blind football team in a five-a-side match with one player seen mistaking a cat for a ball and kicking the feline into a tree.
The Advertising Standards Authority concluded the ad was a “humorous depiction of a fictional situation” and did not “undermine” blind people.
It adds the spot did not condone violence against animals because its premise was “surreal and improbable”.
The decision was immediately slammed by animal welfare and sight loss and charities.
The RSPCA says it is “disappointed” by the decision. “We feel that adverts like this give out a mixed message, no matter how innocently intended,” it adds.
A spokeswoman for the RNIB applauded Paddy Power for using blind players but said it is concerned the ad could “reinforce some negative stereotypes and attitudes about blind people”
Paddy Power claims blind footballers would “gain a greater awareness and admiration” following its “light-hearted” ad and has received “extremely positive feedback” from the blind and partially sighted community.
The bookmaker adds it was careful not to portray the cat-kicking as “deliberate or fun”.