The Yorkshireman was comprehensively beaten by John Lowe, the former Embassy world champion, who not onlywon the match 3-0 but also won each set by three legs to love.
It was a stunning upset for the man who is considered one of the players to beat in the tournament, which is running in direct opposition to the official Embassy World championships for the second year. That event begins at Frimley Green, Surrey next week .
The split came from the British Darts Organisation - the sport's official body - two years ago when several top players broke away to form the World Darts Council.
The event at the Circus Tavern features seven previous Embassy champions - Priestley, Phil Taylor, Lowe, Eric Bristow, Jocky Wilson, Bob Anderson and Keith Deller.
The 24-strong field is split into eight groups of three and, despite being the top seed, Priestley is not the favourite. Apart from Lowe, he also has Wilson in his section.
It was not exactly plain sailing yesterday for the second seed, Rod Harrington. He had to come back from two sets to one down to beat his fellow Englishman Shayne Burgess 3-2.
"I was a bit nervous at the start and after winning the first set I lost the next two because I missed too many doubles," Harrington said after his opening group match. "I had two shots at double 16 to win the third set, missed them both and Shayne took a 2-1 lead. But then I played much better and I won the last two sets each by three legs to one," Harrington added.Reuse content