Stadler made sure he received an invitation to Saturday's made-for-TV event by winning five times and taking the money title on the Champions Tour last year.
'I think that was the reason I played the last seven events last year, to make sure I stayed on and won the money title and got an invite over here,' Stadler said. 'Playing with those three guys, it's something where if you have the opportunity to, you certainly don't want to miss.'
Defending champion Tom Watson, who has had a fast start in Hawaii this year by earning $262,000 in two events, will attempt to defend his title. Last year, he won at Wailea with a par on the third playoff hole worth five skins and $260,000, for a winning total of 10 skins and $400,000.
Palmer was second with five skins and $140,000, Jack Nicklaus made $60,000 with three skins and Lee Trevino was shut out.
The 55-year-old Watson said he feels relaxed and comfortable playing in the islands.
The 39-time PGA Tour winner finished second in the season-opening MasterCard Championship on the Big Island and tied for third at last week's Turtle Bay Championship, the Champions Tour's first full-field event of the season.
'You can't get any better than playing in Hawaii,' he said. 'Where I live in Kansas, it could be 5-below zero. It's not 5-below zero, but you have to wear a couple turtlenecks and a rain suit and maybe use some orange golf balls to find the ball in the snow.'
At Friday's pro-am, Watson jokingly bet Nicklaus $10 in a driving contest on the first tee. But Nicklaus wanted to up the ante to dinner.
Watson decline, explaining he would have to pick up the tab for Nicklaus' entire family.
This is the 17th Skins appearance in 18 years for Palmer, who won the event in 1990, '92 and '93. Nicklaus, who won in 1991, is playing for the 15th time.
Watson is playing his third Skins event, while the 51-year-old Stadler, the youngest in the group, is making his debut.
'Craig Stadler is a youngster as far as I'm concerned,' the 75-year-old Palmer said.
Stadler has had a busy year. He tied for seventh at the MasterCard and played two events on the PGA Tour. He tied for ninth at the Sony Open and tied for 14th at last weekend's Bob Hope Chrysler Classic.
'He's playing great and obviously, he's making a lot of birdies,' Watson said. 'He'll be the man to beat.'
The foursome has combined to win 290 events, including 18 majors and more than $43 million.
'It doesn't get any better playing with Jack and Arnold and Tom,' said Stadler, the Champions Tour player of the year in 2004. 'It's going to be a wonderful day. Make some putts, you'll make a little cash and if you don't, you don't.'
Palmer said he hopes to play better, but is still in honeymoon-mode after being married last week on Oahu.
'My game has been terrible,' Palmer said. 'But there are some encouraging moments now, and I'm feeling a little bit better about my game now. It will take some time to work that all out and, hopefully, we'll see some results this Skins Game.'
Nicklaus, who turned 65 last month, said he hasn't played a competitive round of golf since his back surgery on Nov. 23.
His schedule includes the Skins Game, and 'see after that,' he said.
The first six holes are worth $20,000, Nos. 7-12 $30,000, the next five $40,000 and No. 18 $100,000.
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