By Rory Carroll

SAN FRANCISCO (Reuters) - California's budget watchdog on Thursday gave its blessing to Los Angeles' bid to host the 2024 Olympic games, saying its a "low-cost, low-risk" approach will not require building major new venues and will not subject the state to excessive financial risk.

The Legislative Analyst's Office (LAO) report said a new law allowing the governor to enter into a contract with the city to provide no more than $250 million in state funds to pay for any financial deficits was a sound one.

The state would only be on the hook after other revenue sources have been exhausted, including insurance policies and up to $250 million from the city of Los Angeles.

"Los Angeles' bid relies almost exclusively on existing venues and infrastructure," said Jason Sisney, the LAO's chief deputy legislative analyst.

"This is important to keeping the financial risk for the city and the state low and will help Los Angeles avoid some of the major cost overruns that have plagued some prior Olympic hosts," he said.

The short-term economic gains from the games would likely generate additional state and local tax revenues that would offset some or all public costs, the LAO report said.

"Compared to many past Olympic bids, the current proposal by the LA 2024 organizing groups is a relatively low risk one," the LAO report said.

California Senate President pro Tempore Kevin de Leon of Los Angeles, who authored the bill, praised the report and said the legislature would play a strong oversight role throughout the process.

Los Angeles is up against European glamour cities Paris and Budapest in the race to host the Olympics and Paralypics summer games in 2024. The International Olympic Committee is expected to announce the winning city in September 2017.

Rome Mayor Virginia Raggi in September pulled the plug on the city's bid to host the games, saying that staging them would bury the Italian capital under mountains of debt and tons of cement.

Boston and Hamburg also abandoned their bids for the 2024 games out of concern that hosting the sporting extravaganza would weigh on their finances.

The LA 2024 bid committee this week said the election of Donald Trump to U.S. president on Tuesday could boost the chances of the city winning the games, citing "his longstanding support of the Olympic movement in the United States."

(Reporting by Rory Carroll; Editing by David Gregorio)