You can call someone "chicken" or "chicken hearted" for being scared. Mind it, its not coward which is serious. Is there a funny slang expression like "chicken" in French?
Poule mouillée (lit. “wet hen”) is close: it means a person who lacks courage. It isn't as widely applicable as chicken: you can't use it as an adjective, and it's not as natural as in English to use it as an interjection (though you can say “Espèce de poule mouillée !”, which is roughly equivalent to “You [are] chicken!”). It is usually constructed as “X est une poule mouillée”. For example, a child might launch a race and taunt the other children by saying “le dernier arrivé est une poule mouillée”.
Where English children would shout “Chicken!”, I think French children would shout “oh, le peureux”. Another childish phrase that's close is “t'es pas cap'” (short for capable), meaning “you don't dare” (and hence can translate “I dare you”).
If you want to be rude while talking to a really close friend you could say "tapette" or "t'es une tapette !" which also stands for gay.
Don't use that if that person is actually gay, that would really be homophobic.