Basically, the rules are the same as the NYT spelling bee game with the exception that 3 letter words are allowed. There is an array of 7 letters that students use to spell words. The letter in the middle MUST be used to spell all words. Each puzzle has a solution that uses all of the letters at least once. Just be mindful of whatever letter you put in the middle as it's what determines how difficult the puzzle is. Try to put a letter in the middle that can spell a lot of words that the students should know.
While the game can just be a fun activity, it can also be a great way to practice phonics, prefixes, suffixes, plurals, and general spelling rules. Knowing these rules can help the kids win faster, so if you have a competitive class, it might be a good incentive to remember some of these rules.
Spelling Bee can be played on the blackboard as a class or on paper in pairs or groups. The activity can be quite challenging, so I would not recommend having students play individually unless they are a very strong or competitive class. The worksheet PDF is empty so you can put your own letters into the slots (and also it's doubled to save on paper).
The following are some words I would recommend. I found most of these in the Sunshine middle school textbooks, though a few are seasonal.