Online gambling companies struggle to clear EU hurdles

LONDON (Reuters) – A partnership stuck on Friday between bwin.party Digital Entertainment and a Belgian casino group has defused one of many disputes pitting online gambling companies against governments across Europe.

The agreement came a month after bwin.party’s co-CEO was questioned by Belgian authorities in an escalating license dispute the company said was costing it 700,000 euros ($ 916,000) in monthly revenue.

By joining forces with Belcasinos, a unit of local casino owner Group Partouche, bwin.party neatly met a requirement to have a presence in Belgium to win a license for online poker, casino and sports betting.

The agreement is a rare bright spot in a tough regulatory environment for online gambling companies across the continent.

Betting online on sports events or playing poker on the Internet are increasingly popular pastimes in Europe, where operators say they are held back by unfair and discriminatory rules in many European Union countries.

“It is not a European Union in any way, it is a patchwork of different countries who happen to be in the EU,” said Professor Leighton Vaughan Williams, director of the betting research unit at Nottingham Business School in central England.

“Different countries have different vested interests and different ideas they are trying to promote. Are they trying to protect consumers or to maximize their tax take?” he said.

The 27 EU member states retain the right to regulate their gambling sectors as they see fit, but rules must comply with EU law, broadly meaning they must be consistent and proportionate.

Some companies are scaling back activities in European markets where, they say, regulatory risks are too high or tax rates are punitive.

Betting exchange operator Betfair for instance said this week it was halting marketing and investment in unregulated markets, including EU members Cyprus, Germany and Greece.

William Hill, Britain‘s largest bookmaker, has joined Betfair in pulling out of Greece and has also stopped offering sports betting to German residents because of a 5 percent turnover tax.

STAKES RISE

The stakes are high. Online gambling is growing at an annual rate of almost 15 percent in the EU and will be worth an estimated 13 billion euros ($ 17 billion) by 2015, according to EU figures.

The European Commission, the EU’s executive, stepped in to the debate in October when it published a medium-term plan to clarify regulations and promote cooperation between member states, ruling out EU-wide legislation for the time being.

“All citizens must be adequately protected, money laundering and fraud must be prevented, sport must be safeguarded against betting-related match-fixing and national rules must comply with EU law,” Internal Market and Services Commissioner Michel Barnier said, setting out his approach.

The online operators accuse the European Commission of failing to follow through properly on complaints lodged about regulation in no fewer than 20 or the 27 EU member states.

Barnier has written to member states accused of breaching EU law in the way they handle gambling, seeking an update on the situation by the end of the year.

However, the industry questions whether the EU will go into battle over gambling when it is facing so many other problems.

“They will chip away at some of the most blatant ones,” said Clive Hawkswood, chief executive of trade body the Remote Gambling Association. “What we really need is for them to take some to the European Court and take enforcement action.”

BRITISH TAXES

Gambling companies themselves have taken advantage of different tax regimes where they work in their favor.

This is illustrated in Britain, historically the biggest betting market in Europe and a place with a well-developed gambling culture where bookmakers have operated in town centers for 50 years.

In recent years, most betting companies have moved their British online betting operations to Britain’s overseas territory of Gibraltar. There they are sheltered from a 15 percent tax on gross profit faced by operators based in Britain.

New legislation will close off that loophole after 2014. The shift to a taxation model based on the location of the consumer was expected to cost gambling companies as much as 270 million pounds ($ 435 million) by 2016-17.

Analyst Nick Batram at brokerage Peel Hunt said smaller players would likely be picked off because of the impact of higher tax and regulatory burdens across Europe.

“It is getting more complicated and more expensive. There is more change afoot but it should ultimately play into the hands of the better-capitalized companies.”

In that vein, William Hill has provisionally agreed a 485 million pound takeover of smaller rival Sportingbet, keen to get its hands on the company’s regulated Australian betting business.

“I think there is a lot more M&A activity to come,” said Batram.

(Additional reporting by Rosalba O’Brien; Editing by David Holmes)

Internet News Headlines – Yahoo! News

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Robin Roberts Everything is Fantastic

Good Morning America had a special guest today when co-anchor Robin Roberts called in to help the gang send out 2012 in style!

RELATED - Robin Decks The Halls With Her GMA Family

The Play of the Day has become a signature GMA segment and to honor the year's best, Roberts phoned in to help Josh Elliott announce their favorites. Coming in second was footage of a Walrus doing sit-ups while Eye of the Tiger played over the speakers.

First place honors went to an adorable home movie of two boys trying, and failing, to land a punch in Taekwondo class.

RELATED - Celebs Show Support For Robin Roberts

Roberts then took a moment to let her fans know how she's feeling. "All is well," she said. "Everything is fantastic."

And you can count President Barack Obama among her fans as he was later shown telling Barbara Walters, "Send a big Christmas greeting to Robin Roberts. Such a wonderful person, a person we've come to love. We're rooting for her, and hope she's doing great." So say we all, Mr. President.

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Fewer health care options for illegal immigrants

ALAMO, Texas (AP) — For years, Sonia Limas would drag her daughters to the emergency room whenever they fell sick. As an illegal immigrant, she had no health insurance, and the only place she knew to seek treatment was the hospital — the most expensive setting for those covering the cost.

The family's options improved somewhat a decade ago with the expansion of community health clinics, which offered free or low-cost care with help from the federal government. But President Barack Obama's health care overhaul threatens to roll back some of those services if clinics and hospitals are overwhelmed with newly insured patients and can't afford to care for as many poor families.

To be clear, Obama's law was never intended to help Limas and an estimated 11 million illegal immigrants like her. Instead, it envisions that 32 million uninsured Americans will get access to coverage by 2019. Because that should mean fewer uninsured patients showing up at hospitals, the Obama program slashed the federal reimbursement for uncompensated care.

But in states with large illegal immigrant populations, the math may not work, especially if lawmakers don't expand Medicaid, the joint state-federal health program for the poor and disabled.

When the reform has been fully implemented, illegal immigrants will make up the nation's second-largest population of uninsured, or about 25 percent. The only larger group will be people who qualify for insurance but fail to enroll, according to a 2012 study by the Washington-based Urban Institute.

And since about two-thirds of illegal immigrants live in just eight states, those areas will have a disproportionate share of the uninsured to care for.

In communities "where the number of undocumented immigrants is greatest, the strain has reached the breaking point," Rich Umbdenstock, president of the American Hospital Association, wrote last year in a letter to Obama, asking him to keep in mind the uncompensated care hospitals gave to that group. "In response, many hospitals have had to curtail services, delay implementing services, or close beds."

The federal government has offered to expand Medicaid, but states must decide whether to take the deal. And in some of those eight states — including Texas, Florida and New Jersey — hospitals are scrambling to determine whether they will still have enough money to treat the remaining uninsured.

Without a Medicaid expansion, the influx of new patients and the looming cuts in federal funding could inflict "a double whammy" in Texas, said David Lopez, CEO of the Harris Health System in Houston, which spends 10 to 15 percent of its $1.2 billion annual budget to care for illegal immigrants.

Realistically, taxpayers are already paying for some of the treatment provided to illegal immigrants because hospitals are required by law to stabilize and treat any patients that arrive in an emergency room, regardless of their ability to pay. The money to cover the costs typically comes from federal, state and local taxes.

A solid accounting of money spent treating illegal immigrants is elusive because most hospitals do not ask for immigration status. But some states have tried.

California, which is home to the nation's largest population of illegal immigrants, spent an estimated $1.2 billion last year through Medicaid to care for 822,500 illegal immigrants.

The New Jersey Hospital Association in 2010 estimated that it cost between $600 million and $650 million annually to treat 550,000 illegal immigrants.

And in Texas, a 2010 analysis by the Health and Human Services Commission found that the agency had provided $96 million in benefits to illegal immigrants, up from $81 million two years earlier. The state's public hospital districts spent an additional $717 million in uncompensated care to treat that population.

If large states such as Florida and Texas make good on their intention to forgo federal money to expand Medicaid, the decision "basically eviscerates" the effects of the health care overhaul in those areas because of "who lives there and what they're eligible for," said Lisa Clemans-Cope, a senior researcher at the Urban Institute.

Seeking to curb expenses, hospitals might change what qualifies as an emergency or cap the number of uninsured patients they treat. And although it's believed states with the most illegal immigrants will face a smaller cut, they will still lose money.

The potential impacts of reform are a hot topic at MD Anderson Cancer Center in Houston. In addition to offering its own charity care, some MD Anderson oncologists volunteer at a county-funded clinic at Lyndon B. Johnson General Hospital that largely treats the uninsured.

"In a sense we've been in the worst-case scenario in Texas for a long time," said Lewis Foxhall, MD Anderson's vice president of health policy in Houston. "The large number of uninsured and the large low-income population creates a very difficult problem for us."

Community clinics are a key part of the reform plan and were supposed to take up some of the slack for hospitals. Clinics received $11 billion in new funding over five years so they could expand to help care for a swell of newly insured who might otherwise overwhelm doctors' offices. But in the first year, $600 million was cut from the centers' usual allocation, leaving many to use the money to fill gaps rather than expand.

There is concern that clinics could themselves be inundated with newly insured patients, forcing many illegal immigrants back to emergency rooms.

Limas, 44, moved to the border town of Alamo 13 years ago with her husband and three daughters. Now single, she supports the family by teaching a citizenship class in Spanish at the local community center and selling cookies and cakes she whips up in her trailer. Soon, she hopes to seek a work permit of her own.

For now, the clinic helps with basic health care needs. If necessary, Limas will return to the emergency room, where the attendants help her fill out paperwork to ensure the government covers the bills she cannot afford.

"They always attended to me," she said, "even though it's slow."

___

Sherman can be followed on Twitter at https://twitter.com/chrisshermanAP .

Plushnick-Masti can be followed on Twitter at https://twitter.com/RamitMastiAP .

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Wall Street dips at open on "cliff" overhang

NEW YORK (Reuters) - Wall Street dipped at the open on Friday as investors digested the latest round of economic data, while concerns about a lack of progress by politicians in ongoing fiscal negotiations remained at the forefront.

The Dow Jones industrial average <.dji> dropped 7.22 points, or 0.05 percent, to 13,163.50. The Standard & Poor's 500 Index <.spx> dropped 3.65 points, or 0.26 percent, to 1,415.80. The Nasdaq Composite Index <.ixic> dropped 16.49 points, or 0.55 percent, to 2,975.67.

(Reporting by Chuck Mikolajczak; Editing by James Dalgleish)

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Russia says Syrian rebels might win

MOSCOW/BEIRUT (Reuters) - Syrian rebels are gaining ground and might win, Russia's Middle East envoy said on Thursday, in the starkest such admission from a major ally of President Bashar al-Assad in 20 months of conflict.

"One must look the facts in the face," Russia's state-run RIA quoted Mikhail Bogdanov as saying. "Unfortunately, the victory of the Syrian opposition cannot be ruled out."

Bogdanov, a deputy foreign minister and the Kremlin's special envoy for Middle East affairs, said the Syrian government was "losing control of more and more territory" and Moscow was preparing to evacuate Russian citizens if necessary.

Advancing rebels now hold an almost continuous arc of territory from the east to the southeast of Damascus, despite fierce army bombardments designed to drive them back.

The head of NATO said he thought Assad's government was nearing collapse and the new leader of Syria's opposition told Reuters the people of Syria no longer needed international forces to protect them.

"The horrific conditions which the Syrian people endured prompted them to call on the international community for military intervention at various times," said Mouaz al-Khatib, a preacher who heads Syria's National Coalition.

"Now the Syrian people have nothing to lose. They handled their problems by themselves. They no longer need international forces to protect them. The international community has been in a slumber, silent and late (to react) as it saw the Syrian people bleeding and their children killed for the past 20 months," he added in the interview on Wednesday night.

He did not specify whether by intervention he meant a no-fly zone that rebels have been demanding for month, a ground invasion - which the opposition has warned against - or arms shipments.

He said the opposition would consider any proposal from Assad to surrender power and leave the country, but would not give any assurances until it saw a firm proposal.

In the latest blow to the government, a car bomb killed at least 16 men, women and children in Qatana, a town about 25 km (15 miles) southwest of Damascus where many soldiers live, activists and state media said.

The explosion occurred in a residential area for soldiers in Qatana, which is near several army bases, said Rami Abdelrahman, head of the pro-opposition Syrian Observatory for Human Rights.

He put the death toll as 17, including seven children and two women. State news agency SANA said 16 people had died.

State television blamed the blast on "terrorists" - its term for rebels - and showed footage of soldiers walking by a partly collapsed building, with rubble and twisted metal on the road.

The attack follows three bombs at the Interior Ministry on Wednesday evening, in which state news agency SANA said five people were killed, including Abdullah Kayrouz, a member of parliament from the Syrian Social Nationalist Party.

Apart from gaining territory in the outskirts of Damascus in recent weeks, rebels have also made hit-and-run attacks or set off bombs within the capital, often targeting state security buildings or areas seen as loyal to Assad, such as Jaramana, where twin bombs killed 34 people in November.

The Pakistani Foreign Office said on Thursday security concerns had prompted it to withdraw the ambassador and all Pakistani staff from the embassy in the central suburb of East Mezzeh, a couple miles from the Interior Ministry.

BACK TO THE WALL

Insurgents launched an offensive on Damascus after a July 18 bombing that killed four of Assad's closest aides, including his feared brother-in-law Assef Shawkat, but were later pushed back.

With his back to the wall, Assad is reported to be turning ever deadlier weapons on his adversaries.

"I think the regime in Damascus is approaching collapse," NATO Secretary-General Anders Fogh Rasmussen said on Thursday.

U.S. NATO officials said on Wednesday the Syrian military had fired Scud-style ballistic missiles, which are powerful but not very accurate, against rebels in recent days.

Human Rights Watch said some populated areas had been hit by incendiary bombs, containing flammable materials such as napalm, thermite or white phosphorous, which can set fire to buildings or cause severe burns and respiratory damage.

The British-based Syrian Observatory said war planes were bombing rebel-held eastern suburbs of Damascus on Thursday and artillery was hitting Daraya and Moadamiyeh, southwestern areas near the centre where rebels have been fighting for a foothold.

At least 40,000 people have been killed in Syria's uprising, which started in March 2011 with street protests which were met with gunfire by Assad's security forces, and which spiraled into the most enduring and destructive of the Arab revolts.

The United States, European powers and Arab states bestowed their official blessing on Syria's newly-formed opposition coalition on Wednesday, despite increasing signs of Western unease at the rise of militant Islamists in the rebel ranks.

Western nations at "Friends of Syria" talks in Marrakech, Morocco rallied around a new opposition National Coalition formed last month under moderate Islamist cleric Mouaz Alkhatib.

Russia, which along with China has blocked any U.N. Security Council measures against Assad, criticized Washington's decision to grant the coalition formal recognition, saying it appeared to have abandoned any effort to reach a political solution.

Bogdanov's remarks were the clearest sign yet that Russia is preparing for the possible defeat of Assad's government.

"We are dealing with issues of preparations for an evacuation. We have mobilization plans and are clarifying where our citizens are located," Bogdanov said.

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iPad mini deemed a ‘game changer,’ outgrew Kindle Fire by nearly 50%

Smaller tablets in the 7-inch range have been on the market for more than two years now, but it looks like it took Apple (AAPL) just one month to vault to the top of the category. Mobile advertising firm Millennial Media recently published the findings of a study pitting the iPad mini against Amazon’s (AMZN) popular Kindle Fire, which has been an extremely popular iPad alternative since it first launched last year. According to Millennial, iPad mini usage grew about 50% faster during early November than the Kindle Fire did immediately following its successful launch last year, as measured by ad impressions served by the firm’s network.

Millennial found that impressions served to the iPad mini in early November grew at an average daily rate of 28%. In the weeks following the Kindle Fire’s launch last year, usage of Amazon’s tablet grew roughly 19% each day.

“In the first weeks after the iPad mini went on sale, we saw an average daily growth in impressions of 28 percent. Last holiday season, Amazon launched the Kindle Fire to much anticipation, Millennial Media’s Matt Mills wrote on the company’s blog. “As a comparison, we saw Kindle Fire impressions grow at an average daily rate of 19 percent in the first two weeks after it went on sale last year. So, by our math it looks like Apple could have itself another massive holiday season.”

Mills called the iPad mini a “game changer” and said he expects “a massive amount” of iPad mini tablets to be given as gifts this holiday season.

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Gadgets News Headlines – Yahoo! News

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Taylor Swift Turns 23!

23 On the Dot

The 22 singer turns 23 today and if we know anything about Taylor
Swift's style it's that she loves to rock the dots! Though the
girly-girl has been known to wear lots of stripes and florals, her true
affection seems to lie with polka dots. Click the pics to see a few of
Swift's spotty style statements, and leave her a few birthday wishes!

First up, some dots were spotted on Swift as she was seen leaving Studio 59 in New York City on Dec. 4, 2012. 

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Dozens sue pharmacy, but compensation uncertain

NASHVILLE, Tenn. (AP) — Dennis O'Brien rubs his head as he details ailments triggered by the fungal meningitis he developed after a series of steroid shots in his neck: nausea, vomiting, dizziness, drowsiness, blurred vision, exhaustion and trouble with his speech and attention.

He estimates the disease has cost him and his wife thousands of dollars in out-of-pocket expenses and her lost wages, including time spent on 6-hour round trip weekly visits to the hospital. They've filed a lawsuit seeking $4 million in damages from the Massachusetts pharmacy that supplied the steroid injections, but it could take years for them to get any money back and they may never get enough to cover their expenses. The same is true for dozens of others who have sued the New England Compounding Center.

"I don't have a life anymore. My life is a meningitis life," the 59-year-old former school teacher said, adding that he's grateful he survived.

His is one of at least 50 federal lawsuits in nine states that have been filed against NECC, and more are being filed in state courts every day. More than 500 people have gotten sick after receiving injections prepared by the pharmacy.

The lawsuits allege that NECC negligently produced a defective and dangerous product and seek millions to repay families for the death of spouses, physically painful recoveries, lost wages and mental and emotional suffering. Thirty-seven people have died in the outbreak.

"The truth is the chance of recovering damages from NECC is extremely low," said John Day, a Nashville attorney who represents several patients who have been sickened by fungal meningitis.

To streamline the process, attorneys on both sides are asking to have a single judge preside over the pretrial and discovery phases for all of the federal lawsuits.

This approach, called multidistrict litigation, would prevent inconsistent pretrial rulings and conserve resources of all parties. But unlike a class-action case, those lawsuits would eventually be returned to judges in their original district for trial, according to Brian Fitzpatrick, a law professor at Vanderbilt University Law School in Nashville.

Even with this approach, Fitzpatrick noted that federal litigation is very slow, and gathering all the evidence, records and depositions during the discovery phase could take months or years.

"Most of the time what happens is once they are consolidated for pretrial proceedings, there is a settlement, a global settlement between all the lawyers and the defendants before anything is shipped back for trial," he said.

A lawyer representing NECC, Frederick H. Fern, described the consolidation process as an important step.

"A Boston venue is probably the best scenario," Fern said in an email. "That's where the parties, witnesses and documents are located, and where the acts subject to these complaints occurred."

Complicating efforts to recover damages, attorneys for the patients said, NECC is a small private company that has now recalled all its products and laid off its workers. The company's pharmacy licenses have been surrendered, and it's unclear whether NECC had adequate liability insurance.

Fern said NECC has insurance, but they were still determining what the policy covers.

But Day says, "It's clear to me that at the end of the day, NECC is not going to have sufficient assets to compensate any of these people, not even 1 percent."

As a result, many attorneys are seeking compensation from other parties. Among the additional defendants named in lawsuits are NECC pharmacist and co-founder Barry Cadden; co-founder Greg Conigliaro; sister company Ameridose and its marketing and support arm, Medical Sales Management.

Founded in 2006 by Cadden and Conigliaro, Ameridose would eventually report annual revenue of $100 million. An NECC spokesman didn't respond to a request for the pharmacy's revenue.

While Federal Drug Administration regulators have also found contamination issues at Westborough, Mass.-based Ameridose, the FDA has said it has not connected Ameridose drugs to infection or illness.

Under tort law, a lawsuit has to prove a defendant has a potential liability, which in this case could be anyone involved in the medical procedure. However, any such suit could take years and ultimately may not be successful.

"I would not be surprised if doctors, hospitals, people that actually injected the drugs, the people that bought the drugs from the compounding company, many of those people will also be sued," said Fitzpatrick.

Plaintiffs' attorneys said they're considering that option but want more information on the relationships between the compounding pharmacy and the hundreds of hospitals and clinics that received its products.

Day, the attorney in Tennessee, said the clinics and doctors that purchase their drugs from compounding pharmacies or manufacturers could be held liable for negligence because they are in a better position to determine the safety of the medicine than the patients.

"Did they use due care in determining from whom to buy these drugs?" Day said.

Terry Dawes, a Michigan attorney who has filed at least 10 federal lawsuits in the case, said in traditional product liability cases, a pharmaceutical distributor could be liable.

"We are looking at any conceivable sources of recovery for our clients including pharmaceutical supply places that may have dealt with this company in the past," he said.

Ten years ago, seven fungal meningitis illnesses and deaths were linked to injectable steroid from a South Carolina compounding pharmacy. That resulted in fewer than a dozen lawsuits, a scale much smaller than the litigations mounting up against NECC.

Two companies that insured the South Carolina pharmacy and its operators tried unsuccessfully to deny payouts. An appellate court ruled against their argument that the pharmacy willfully violated state regulations by making multiple vials of the drug without specific prescriptions, but the opinion was unpublished and doesn't set a precedent for the current litigation.

The lawsuits represent a way for patients and their families recover expenses, but also to hold the pharmacy and others accountable for the incalculable emotional and physical toll of the disease.

A binder of snapshots shows what life is like in the O'Briens' rural Fentress County, Tenn., home: Dennis hooked up to an IV, Dennis in an antibiotics stupor, bruises on his body from injections and blood tests. He's had three spinal taps. His 11-day stay in the hospital cost over $100,000, which was covered by health insurance.

His wife said she sometimes quietly checks at night to see whether her husband of 35 years is still breathing.

"In my mind, I thought we were going to fight this and get over it. But we are not ever going to get over it," said Kaye O'Brien.

Marjorie Norwood, a 59-year-old grandmother of three who lives in Ethridge, Tenn., has spent just shy of two months total in the hospital in Nashville battling fungal meningitis after receiving a steroid injection in her back. She was allowed to come home for almost a week around Thanksgiving, but was readmitted after her symptoms worsened.

Family members are still dealing with much uncertainty about her recovery, but they have not filed a lawsuit, said their attorney Mark Chalos. He said Norwood will likely be sent to a rehabilitation facility after her second stay in the hospital rather than return home again.

Marjorie Norwood's husband, an autoworker, has taken time off work to care for her and they depend on his income and insurance.

"It doesn't just change her life, it changes everyone else's life around her because we care about her and want her to be happy and well and have everything that she needs," said her daughter, Melanie Norwood.

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Wall Street opens flat on "fiscal cliff" worry

LONDON, Dec 13 (Reuters) - The departure of Spanish strugglers HRT from Formula One still leaves the sport with one team too many, commercial supremo Bernie Ecclestone said on Thursday. Madrid-based HRT have not been included on the official 2013 entry list published by the governing International Automobile Federation, a move that leaves 11 teams and 22 cars on the starting grid. "I'd rather have 10," Ecclestone told Reuters. "I never wanted 12. "It's just that 10 is easier to handle, for the promoters, for transport. We'd rather have 10...so long as we don't lose Ferrari. ...

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North Korea launches rocket , raising nuclear arms stakes

SEOUL/TOKYO (Reuters) - North Korea successfully launched a rocket on Wednesday, boosting the credentials of its new leader and stepping up the threat the isolated and impoverished state poses to opponents.

The rocket, which North Korea says put a weather satellite into orbit, has been labeled by the United States, South Korea and Japan as a test of technology that could one day deliver a nuclear warhead capable of hitting targets as far away as the continental United States.

"The satellite has entered the planned orbit," a North Korean television news reader clad in traditional Korean garb announced, after which the station played patriotic songs with the lyrics "Chosun (Korea) does what it says".

The rocket was launched just before 10 a.m. (0100 GMT), according to defense officials in South Korea and Japan, and was more successful than a rocket launched in April that flew for less than two minutes.

The North American Aerospace Defense Command (NORAD) said that it "deployed an object that appeared to achieve orbit", the first time an independent body has verified North Korean claims.

North Korea followed what it said was a similar successful launch in 2009 with a nuclear test that prompted the U.N. Security Council to stiffen sanctions that it originally imposed in 2006 after the North's first nuclear test.

North Korea is banned from developing nuclear and missile-related technology under U.N. resolutions, although Kim Jong-un, the youthful head of state who took power a year ago, is believed to have continued the state's "military first" programs put in place by his late father, Kim Jong-Il.

North Korea hailed the launch as celebrating the prowess of all three members of the Kim family to rule since it was founded in 1948.

"At a time when great yearnings and reverence for Kim Jong-il pervade the whole country, its scientists and technicians brilliantly carried out his behests to launch a scientific and technological satellite in 2012, the year marking the 100th birth anniversary of President Kim Il Sung," its KCNA news agency said. Kim Il Sung, the current leader's grandfather, was North Korea's first leader.

The United States condemned the launch as "provocative" and a breach of U.N. rules, while Japan's U.N. envoy called for a Security Council meeting. However, diplomats say further tough sanctions are unlikely from the Security Council as China, the North's only major ally, will oppose them.

"The international community must work in a concerted fashion to send North Korea a clear message that its violations of United Nations Security Council resolutions have consequences," the White House said in a statement.

U.S. intelligence has linked North Korea with missile shipments to Iran. Newspapers in Japan and South Korea have reported that Iranian observers were in the North for the launch, something Iran has denied.

Japan's likely next prime minister, Shinzo Abe, who is leading in opinion polls ahead of an election on Sunday and who is known as a hawk on North Korea, called on the United Nations to adopt a resolution "strongly criticizing" Pyongyang.

A North Korean Foreign Ministry spokesman reiterated that the rocket was a "peaceful project".

"The attempt to see our satellite launch as a long-range missile launch for military purposes comes from hostile perception that tries to designate us a cause for security tension," KCNA cited the spokesman as saying.

"STUMBLING BLOCK"

China had expressed "deep concern" prior to the launch which was announced a day after a top politburo member, representing new Chinese leader Xi Jinping, met Kim Jong-un in Pyongyang.

On Wednesday, its tone was measured, regretting the launch but calling for restraint on any counter-measures, in line with a policy of effectively vetoing tougher sanctions.

"China believes the Security Council's response should be cautious and moderate, protect the overall peaceful and stable situation on the Korean peninsula, and avoid an escalation," Chinese Foreign Ministry spokesman Hong Lei told journalists.

Bruce Klingner, a Korea expert at the Heritage Foundation, said: "China has been the stumbling block to firmer U.N. action and we'll have to see if the new leadership is any different than its predecessors."

A senior adviser to South Korea's president said last week it was unlikely there would be action from the United Nations and Seoul would expect its allies to tighten sanctions unilaterally.

Kim Jong-un, believed to be 29 years old, took power when his father died on December 17 last year and experts believe the launch was intended to commemorate the first anniversary of his death. The April launch was timed for the centennial of the birth of Kim Il Sung.

Wednesday's success puts the North ahead of the South which has not managed to get a rocket off the ground.

"This is a considerable boost in establishing the rule of Kim Jong-un," said Cho Min, an expert at the Korea Institute of National Unification.

There have been few indications the secretive and impoverished state, where the United Nations estimates a third of people are malnourished, has made any advances in opening up economically over the past year.

North Korea remains reliant on minerals exports to China and remittances from tens of thousands of its workers overseas.

Many of its 22 million people need handouts from defectors, who have escaped to South Korea, for basic medicines.

Given the puny size of its economy - per capita income is less than $2,000 a year - one of the few ways the North can attract world attention is by emphasizing its military threat.

It wants the United States to resume aid and to recognize it diplomatically, although the April launch scuppered a planned food deal.

The North is believed to be some years away from developing a functioning nuclear warhead although it may have enough plutonium for about half a dozen nuclear bombs, according to nuclear experts.

It has also been enriching uranium, which would give it a second path to nuclear weapons as it sits on big natural uranium reserves.

"A successful launch puts North Korea closer to the capability to deploy a weaponized missile," said Denny Roy, a senior fellow at the East-West Center in Hawaii.

"But this would still require fitting a weapon to the missile and ensuring a reasonable degree of accuracy. The North Koreans probably do not yet have a nuclear weapon small enough for a missile to carry."

The North says its work is part of a civil nuclear program although it has also boasted of it being a "nuclear weapons power".

(Additional reporting by Jumin Park and Yoo Choonsik in SEOUL; David Alexander, Matt Spetalnick and Paul Eckert in WASHINGTON; Linda Sieg in TOKYO, Sui-Lee Wee and Michael Martina in BEIJING,; Rosmarie Francisco in MANILA; Writing by David Chance; Editing by Raju Gopalakrishnan and Robert Birsel)

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