Lichfield fighter James Austin lost his first-round contest against Japan's third seed Takamasa Anai in the men's under-100kgs at ExCeL.
Austin came out to a raucous reception from the North Arena 2 crowd, desperate for some home success. The 28-year-old was not overawed by the challenge and went on the offensive as Anai picked up a shido warning, only for the Briton to then get the same penalty midway through the five-minute contest.
Anai, world champion in 2010, moved ahead by 1-0 when Austin was warned again, with another penalty handing the Japan fighter a wazari score and the victory.
Austin admitted he was always going to be up against it with such a tough opening draw, but felt he did have a shot at Olympic glory.
"He is world champion, a tactically great fighter and did not give me many opportunities, and only won on penalties, which is never a nice way to lose," said the defeated Briton.
"We had great preparation going into it, and although it was a tough draw, this is the Olympic Games and I felt I could have gone a bit further. We just need a little bit more experience at this level. I have only been in the full-time set-up for the last four years and my judo has come on so much.
"In another four years, I think I will be at the level where I can be an Olympic contender."
Greenwich-born Gemma Gibbons fared better in the under-78kg category and defeated 2011 European bronze medallist Yahima Ramirez of Portugal.
Gibbons, 24, has only just stepped up a weight division in 2012, winning the British Open and silver medals at World Cup's in Romania and Estonia.
Despite being roared on by the home crowd, there was little to choose between the fighters after the first two minutes. However, the arena erupted when the Team GB fighter then executed an ippon throw to move into the last 16 and set up a clash against Mongolia's Lkhamdegd Purevjargal.