After Jimmy Juan was bundled over in the penalty area it appeared the referee Lee Mason pointed to the penalty spot but consequently changed his mind.
Royle told the club website: “ He gave it and changed his mind so God knows what was going through his mind. He is an excellent official normally, but he knew he had made a mistake and could not get hold of the game after that."
The Town boss felt this was a pivotal moment of the game: “That mistake meant we went in at half time nil-nil instead of one-nil up and the whole complexion of the game changes."
Royle however was also highly critical of his players: "The keeper was our best player and when that happens it is because you are not defending properly. We didn't pass it or win it in midfield and we were impotent up front."
The poor performance left Royle promising a changed lineup in the remaining games with Towns play-off ambitions over: "We will have changes next week which will probably show more the future of the club. At the same time we still have a lot to play for as we are professionals and we want to win all of them.”
Luton Boss Mike Newell admitted it was fortunate that Ipswich were not awarded a penalty.
Newell told the Luton Town Club website: "They had a bit of pressure at times and had a penalty that wasn't given but these things happens to you on occasions and we had the same thing at Leeds the other week."
The Luton Manager was pleased with his sides performance and the end result: "Ipswich are a side in transition, but they were not long in the Premiership and its another scalp for us."
Defeat leaves Ipswich in 11th place and without in win in five matches.