- Albion knocked out in the second round
- Jake Forster-Caskey gave the Seagulls the lead from the penalty spot
- Milan Lalkovic and Rico Henry send the Saddlers through
- Chris O'Grady misses from the spot in the second half
It was a tale of two penalties, as Albion were knocked out of the Capital One Cup, after they suffered their first defeat of the season at Walsall tonight.
The much-changed Seagulls seemed to be on their way through after Jake Forster-Caskey gave Chris Hughton's men a half-time lead, when he converted from the penalty spot.
However, Milan Lalkovic levelled the scores, before Rico Henry won the tie late on for the home side - but not before Chris O'Grady had missed from the spot with the scores level at 1-1.
An end-to-end first-half, which saw chances at both ends, was preceded by an impeccable minute's silence in memory of the victims of Saturday's Shoreham air crash.
Albion started brightly with wide berths occupied by Jamie Murphy and Solly March - recalled back into the England under-21 fold, alongside Seagulls teammates Forster-Caskey and Christian Walton.
The pair were either side of lone striker O'Grady, and Forster-Caskey played just off the Seagulls striker.
Liam Rosenior stung the hands of home keeper Neil Etheridge, after he ended an excellent passing move by Albion with a fierce drive from a tight angle on the right.
At the other end Niki Maenpaa - back in goal for the League Cup - got down well to pounce on a well-executed dipping volley from Reece Flanagan, and moments later Lewis Dunk was on hand to make a crucial tackle to deny Kieron Morris from close range.
Forster-Caskey went on the charge, midway through the first-half, and unleashed a low drive destined for the bottom corner, until Etheridge got down smartly to push the ball away to safety with both hands.
Lalkovic went close with two efforts from distance; one a free-kick on the edge of the Albion box, and also when he cut inside from the left and attempted to curl the ball into the opposite corner of the goal.
Albion went ahead when Forster-Caskey was clumsily brought down by Jason Demetriou inside the box, and the England under-21 international stepped up to calmly place his spot-kick into the bottom-right corner, sending Etheridge the wrong way in the process.
After the interval, Albion were indebted to Danny Holla, for a vital block as James O'Connor was given the chance to level with a free header at close range, but the Dutch midfielder was back to get a vital block on the powerful goalbound header.
The impressive Lalkovic had been the home side's main threat throughout the game, and it was the Slovakian under-21 international who levelled for Walsall. The ball sat up perfectly for him on the edge of the box, and he smashed it emphatically past Maenpaa into the roof of the net.
The big Finn had little chance with the goal, but he made an outstanding save to push away Morris's rising effort, which was heading for the top-right corner.
At the other end, O'Connor sent O'Grady tumbling in the box and referee Peter Bankes awarded Albion a second penalty. O'Grady took it, but didn't repeat Forster-Caskey's success in the first half, and put his kick over the bar.
That miss ultimately proved costly for Albion, as Henry popped up with the winner with less than five minutes left to play, firing home from close range to send Walsall through.