* Yokohama was long undecided amid worries about addiction, crime
* Las Vegas Sands says interested in Yokohama and Tokyo, not Osaka
* Japan hopes casinos will bolster tourism, investment (Adds statement from Las Vegas Sands)
By Ritsuko Ando
TOKYO, Aug 22 (Reuters) - Japan's second-largest city, Yokohama, said on Thursday it would bid to host a casino resort, a newly legalised industry the government hopes will stimulate the economy and tourism.
Yokohama, facing Tokyo Bay and located a short train ride from the capital, joins candidates such as Osaka, Nagasaki and Wakayama vying to host integrated resorts (IR) expected to attract more tourists and investment.
Las Vegas Sands Corp promptly announced interest in Yokohama, saying it would pursue IR development there or in the capital rather than in Osaka. Osaka has been particularly aggressive in courting casino development, but some gaming companies prefer a site in or near Tokyo.
Las Vegas Sands considered Osaka but decided that "an investment in Tokyo or Yokohama gives us the best opportunity," CEO Sheldon Adelson said in a statement.
Japan is widely seen as a prize market for casino operators due to its affluent population of 128 million and proximity to Asia's wealthy gamblers. The government is expected to allow casino resorts in three sites initially.
Yokohama had long been undecided about a bid amid worries about addiction and crime.
"We must look to Yokohama's future, the 20-30 years ahead," Mayor Fumiko Hayashi told a news conference streamed on the city government's website, announcing the bid.
"I've come to the conclusion that in order to achieve growth and development, we need IR."
Japanese lawmakers finished legalising casinos last year after a series of controversial bills and years of debate, with opponents citing risks of increased gambling addiction and organised crime activity.
Prolonged discussions meant no resorts will be open in time for the Tokyo 2020 Olympics, with the government yet to pick hosts and operators.
But new casino resorts are expected to help Japan maintain growth in tourism and investment after the Summer Games are over. Some analysts have said the casino market could be worth around $20 billion a year, or even more when opened in three cities.
Besides Las Vegas Sands, international gaming companies including Wynn Resorts Ltd, MGM Resorts International and Caesars Entertainment Corp are eyeing the market, and may have to battle to win operating rights. ($1 = 106.4500 yen) (Reporting by Ritsuko Ando; Editing by David Dolan and Muralikumar Anantharaman)