The baker can refuse him. There is no law compelling him to bake the cake, because the Klan Wizard is not a protected class against discrimination. Also as I wrote originally, “A business CAN generally refuse non-essential services (eg, not medical, emergency, etc) on personal grounds. But if they violate those protected classes, they can be sued. The end result will usually depend on the precedence in that particular court circuit. And, if “sexual orientation” isn’t in that state’s laws, how the judge and precedence in that circuit reads “creed.”
It’s a tricky question, I grant you. But do we really want to return to a time when people could refuse services on the basis of race, for example, or gender, or...? I don’t have the answers on this one, but I do know that the Arizona law (now vetoed) was not a step I wanted to see happen. bad for business, for starters. Too much backlash.
This is not refusal to simply serve a gay person. This is refusal to take part in a ceremony that goes completely against the religious convictions of the business. That is why we have a first amendment- to protect citizens from violating their religious beliefs. I would have a problem if the woman simply wanted some muffins that morning. That is not the issue. They wanted a particular item that the business did not provide....gay wedding cakes. You cannot force the baker to make gay wedding cakes!