I'm in the Wato is anti-semitism camp.

From wikipedia

Allegations of antisemitismIt has been suggested that this character is offensive because he resembles a stereotypical Jewish caricature. He has a large nose, beady eyes, and speaks in a gravelly voice and is portrayed as greedy and covetous, another common stereotype of Jews. J. Hoberman of The Village Voice called him a blatant ethnic stereotype due to his hooked nose. Bruce Gottlieb of Slate magazine criticized him as well, comparing his character to the anti-Semitic notion that the Jewish race is "behind the slave trade."Patricia J. Williams of The Nation stated that Watto was also described as a stereotype of Arabs, but that he was "more comprehensively anti-Semitic -- both anti-Arab and anti-Jew." She added that Watto reminded her of an "anti-Semitic caricature published in Vienna at the turn of the 20th century."Jane Prettyman of the American Review noted that after leaving the theater, she heard two young boys describe him as "that weird little Jewish guy with wings". Prettyman described his depiction as "not at all subtle", and said that "it can be counted on to flush out already-formed Jew-haters among young audiences and give them permission to continue their hatred out loud."