On the comeback trail after a 2017 season disrupted by injury, Raonic looked off the pace as he was picked apart 6-7(5) 7-5 6-4 7-6(4) by the 86th-ranked Slovak on showcourt two.
"I was not prepared for this situation so I will take a whole new review," Raonic told reporters.
"I was hoping I would be able to work my way in (to the tournament) but that's not the case."
He had reached the last eight in his last three visits to Melbourne, making the semi-finals in 2016, and his ability to fire down a thunderous ace kept him in the contest until the fourth set tiebreak.
Two more aces, taking his match tally to 36, briefly gave 22nd seed Raonic a 4-3 lead but he was unable to match Lacko's accuracy and mobility and the Slovak progressed to meet Argentine Nicolas Kicker in round two.
Raonic has struggled since reaching last year's Wimbledon quarter-finals and missed the U.S. Open with a wrist injury.
He then hurt his calf in Tokyo in October and suffered a knee injury in November, cutting short his off-season training.
"I'm not where I need to be at," Raonic, now ranked 23, said. "I struggled physically, but thankfully not through injury. Just in terms of fitness and being prepared.
"I was just not sharp, not quick, not hitting hard or aggressive and couldn't dictate."
(Reporting by Nick Mulvenney in Sydney, editing by Peter Rutherford)
