I would think that a progressive bad beat jackpot would be a problem for a home game. Its the kind of thing that can get out of hand. What happens when the game breaks up and there is a lot of money in the jackpot? There are too many problems I can imagine with a large badbeat jackpot.

If you really want to have a prize for a bad beat, maybe its the kind of thing that should be a set prize (like every player in the game throws in a set amount of money at the time the bad beat happens).