Do you allow prop bets in your home game? Any rules that you use to govern (other than obviously not allowing anything that might influence active players)? In cash games do you allow players to make prop bets with chips from their stacks. Etc.
Yes, but only if everyone at the table agrees to it and only in cash games. We have only had bets from chips on the table so far. It can sometimes be good to add some action into the game. Winning with 7-2 is a popular one.
We don't do it often. We use separate chips. All one color from a different set. Usually they have a .25 value. You buy 5 bucks work. We will play a three card prop bet. You draw three random cards from a different deck that isn't in play. You draw 2h, 7c, jd. If any of these card values hit on the flop, everyone gives you one chip. If the exact card hits on the flop they give you 4 chips.
I allow smaller prop bets to be made from active chip stack (obviously cash game only). We typically play 25¢/50¢ and everyone buys in for ~$50, so the occasional "bet you a dollar the next card is red" kind of prop bet IMHO doesn't really affect the active play or stack sizes. If it gets more frequent and the stakes increase, I'll switch to cash (cash typically never plays at my games, I have plenty 'O chips). Larger bets ("$20 the Jets don't cover the spread") always come from cash out of pocket. I've had games where the prop betting was three to four times the poker cash that was on the table - alcohol was of course involved, haven't a had a game like that in a while. I'll allow it during a tourney as well as long as it (A) doesn't affect the action/pace of play and (B) is completely independent of what's going on in the tourney. So essentially things like sports bets, side bets on if someone will draw out during a particular hand (only after all bets/calls and only by those not participating in the hand), and of course the chip race. Nothing involving the tourney results or during live betting, nothing like "I bet you player 1 knocks out player 2" or anything that would sway one player to be singled out, teamed up on or influence a call/raise/fold.