It would appear again that you can read whatever you like into LOTR! I think that Tolkien often talks of outward maninfestations of inward evil. Smeagol started off as a hobbit like creature - obviously not ugly, with any specific physical deformity etc. or mention of any racial characteristics. The changes which took place in his body were a direct result of the evilness which took hold of him. Conversely Aragorn, hero that he is, was seen to look foul but felt fair!I don't think Tolkien attached any specific racial tags to him either.
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2A Balrog. A demon from the underpants (Gandalf)
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