Blend the watermelon in a blender or food processor. Then strain.
Add the lime juice to the strained watermelon liquid and stir.
Prepare the sugared rim, if using: In a small shallow bowl or plate, combine the sugar, sea salt and lime zest. Use the squeezed limes to rub the rim of the glass, then set the glass upside down in the sugar mixture until the rim is coated. Set aside.
In the bottom of a shaker muddle the basil with the tequila for a minute. Then fill the shaker with ice, and add the watermelon mixture. Shake to combine.
Fill the prepared glasses with ice and pour the margarita over until the glass is filled.