Continuity mistake: The first time John Ritter is complaining to Bernie Mac, in the shot facing John, Bernie is leaning back with his feet on his desk, but when the shot changes to face Bernie, he is suddenly sitting normally.
Continuity mistake: The first time we see Thurman Murman played by Brett Kelly, the kid steps off a bus to visit Santa in the mall. His upper lips is loaded with snot that is visible. The amount lessens in between shots when he's talking to Willy Stokes.
Continuity mistake: When it first says, "Several months later," Willie is holding a whole lime. Camera cuts and it is now nicely wedged.
Factual error: The last half of the movie is supposedly set in Phoenix, Arizona. Since I live there, it was obvious that none of the shopping centers, housing developments, street names, police car markings, or police uniforms were from Phoenix. They looked like they were possibly from Los Angeles.
Audio problem: As Bad Santa is at the arcade "thrusting the girl", he is heard talking to her, and he is obviously saying something else, and at some points his mouth is closed. Very noticeable.
Continuity mistake: After Willie and Marcus rob the first safe, they are sitting at a bar. Marcus agrees to one more drink. They tap glasses and Marcus takes a drink and leaves it half full. Next shot its empty. Next shot there's just a tiny amount in the glass.
Continuity mistake: When Willie gets thrown over the bar, two stools fall over. In the next shot, they are back up.
Continuity mistake: The washcloth changes color and design when Willy is in the tub.
Revealing mistake: One of the accountants' computers has no power cord attached to it.
Continuity mistake: In the kitchen scene after Thurman cuts his hand, Willie turns off the faucet and then it's back on again.
Continuity mistake: When the kid takes Willie the orange juice there is sun on Willie's face. Camera cuts and it's disappeared.
Answer: My guess is that when he was a child, he was molested by a man dressed as Santa Claus, and ever since then he has been holding a grudge against people dressed as Santa Claus. You can see him staring angrily at Willie in the bar even before Willie notices him.