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Mr. Watts is a minor character from the popular game Bully - although he is not antagonistic towards the main protagonist (Jimmy Hopkins) he does have a minor criminal side (like many of the characters in the game): which is exposed during a mission that occurs after Jimmy stumbles upon the chemistry teacher, half-crazed following an experiment gone awry.
Mr. Watts reveals to Jimmy that he utilizes the chemistry sets in his spare time to create what are presumably drugs, he then has Jimmy deliver packages containing the mysterious drugs to several people in town, for monetary gain.
Although Mr. Watts in no shape of form threatens Jimmy he can be considered a drug dealer of sorts due to this, as well as corrupt - a trait many other staff members have (for example Mr. Watts is a victim of a date-rape by the school lunch lady, Edna).