Cube and freeze your watermelon for at least 4 hours. I recommend cubing or cutting the watermelon into chunks, removing the rind, and lying flat on a parchment lined baking sheet and then freezing. This will take up more space in your freezer, but it will make it a lot easier to work with when making the slushie.
Once frozen work in batches to make the drink depending on the size of your blender/food processor. I like to work in two batches. Add half the cubed watermelon, ½ cup sugar, ¼ cup lime juice to a food processor or high powered blender.
Blend for 20-40 seconds, using a tamper if your blender has one- until it is the consistency you want. If the consistency is too thick add ¼ cup water and try blending again.