Remove rind from watermelon and cut into cubes. Freeze for at least 4 hours.

To make simple syrup, use peeler to remove zest from lime. Add lime peel to sugar and water in small saucepan. Bring to boil and then reduce heat to simmer just until sugar melts, about 3 minutes. Remove from heat and allow syrup to cool with lime peel.

In blender, combine frozen watermelon, simple syrup (with lime peel removed), juice from lime, and tequila. Blend until smooth. No need for ice if watermelon is frozen and simple syrup is cool.

Rim glass with kosher salt. Pour margarita into glass and garnish with fresh lime slice.