The fast-growing group paid €101 million (85.6m) for the outstanding 39 per cent stake in the Australian company it did not already own. Analysts said the deal would help Paddy Power's strategy of strengthening its position beyond Europe.
The company recently announced it would create 1,440 jobs worldwide, including 800 in Britain, as part of a three-year expansion programme.
It said yesterday that the acquisition of the remaining Sportsbet shares would provide a springboard for expansion Down Under.
Patrick Kennedy, Paddy Power's chief executive, said: "It gives us the ability to develop further in Australia. For as long as we owned 61 per cent of the business it wasn't easy to make further acquisitions because you had minority shareholders so I think it positions us to do other things."
After the Sportsbet acquisition the Irish group will have €66m in cash that Kennedy said would help bankroll any future acquisitions.
Paddy Power is funding the Sportsbet deal with €84m of cash, the issue of €14m worth of shares and assuming a €3m obligation to some Sportsbet employees.
In addition, Paddy Power will pay an additional A$25m if Sportsbet's underlying earnings in 2013 exceed A$80m. Kennedy said the deal would be earnings-enhancing next year, while he repeated that his company was on target for growth of up to 40 per cent in underlying earnings this year.
He added that the company could weather heavy snowfalls leading to the cancellation of some sports fixtures in Ireland and Britain.
That includes the first day of the Ireland's Leopardstown Christmas festival, which normally sees thousands attend the race meeting in Dublin on Boxing Day.
"Three quarters of our profits are online and almost half of the paddypower.com online revenues come from games and bingo and poker and casinos, and are not dependent on sporting fixtures.
The group put out a strong trading update in November covering the first half of 2010, helped by the football World Cup last summer. However, the company has said that trading conditions in its home territory, recently bailed out by the IMF and European Union, remain challenging.
Analysts said yesterday's move in mopping up the shares in Sportsbet it did not already own will bolster Paddy Power's previously-expressed contention that robust international expansion will help Ireland's battered economic and fiscal position.
The group pays corporation tax in Ireland on all its internet and telephone betting profits from the 162 countries it operates in.