Yes, badly is a Scrabble word!

Adverb

1. To a severe or serious degree

2. (`ill' is often used as a combining form) in a poor or improper or unsatisfactory manner; not well

3. Evilly or wickedly

4. In a disobedient or naughty way

5. With great intensity (`bad' is a nonstandard variant for `badly')

6. Very much; strongly

7. Without skill or in a displeasing manner

8. In a disadvantageous way; to someone's disadvantage

9. Unfavorably or with disapproval

10. With unusual distress or resentment or regret or emotional display