Watto wasn’t a very good character in Star Wars, in my opinion. In retrospect, it does seem like Watto is a bad representation of Jewish stereotypes. Which makes me hate the character even more so.
In The Phantom Menace, he’s the slave owner of Anakin Skywalker and his mother. Amazingly, he was immune to Qui-Gon Jinn’s Jedi mind trick.
So Qui-Gon manages to free Anakin Skywalker but not his mother with a pod racing bet.
By the time of Attack of the Clones, it’s a rough time for Watto. He looks like he’s homeless on the street and he had to sell Anakin’s mother for money. I’m actually really surprised Anakin treated him friendly after that.