The Supreme Court of the United States has ruled in favour of the baker in the world's most high-profile "gay wedding cake" case.

In Masterpiece Cakeshop v Colorado Civil Rights Commission, the Supreme Court overturned the Colorado Civil Rights Commission's original decision that refusing to bake a cake for a same-sex wedding was inconsistent with Colorado anti-discrimination laws.

Some media reports have suggested this decision poses a risk to LGBTI rights. But does it really?

And what does the case mean for Australia, particularly with the upcoming release of the Ruddock religious freedom report?

What happened in this case?

Sorry, this video has expired United States Supreme Court rules in favour of Colorado baker

In 2012, same-sex couple Charlie Craig and Dave Mullins asked Jack Phillips, who runs Masterpiece Cakeshop in Colorado, to make them a wedding cake. Phillips said "no" because it would be contrary to his religious beliefs to participate in a same-sex wedding.

The couple complained to the Colorado Civil Rights Commission, which found that Masterpiece and Phillips breached Colorado laws prohibiting discrimination on the ground of sexual orientation. That decision was upheld by the Colorado State Supreme Court.

Masterpiece and Phillips appealed the case to the US Supreme Court, making two main arguments. The first was that requiring Phillips to exercise artistic talent in favour of same-sex marriage amounted to "compelled" speech, violating the First Amendment right to free speech. The second argument was that requiring a person to participate in the celebration of a same-sex wedding contrary to their religious beliefs violated the First Amendment right to the free exercise of religion.

What did the Court decide?

The Supreme Court's decision, written by Justice Anthony Kennedy, was narrow, procedural and did not directly decide either of the two main arguments raised by Phillips. It decided that the way in which the Colorado Civil Rights Commission handled the case was unconstitutional.

It was found that the Commission dealt with the case in a biased and unfair manner that was hostile to religion. The Supreme Court criticised the commission for reasons including that one commissioner labelled the use of religious beliefs to justify discrimination as "one of the most despicable pieces of rhetoric that people can use", even comparing the situation to "slavery" and "the Holocaust". This breached Phillips' constitutional right to have his case considered fairly and neutrally.

Charlie Craig and David Mullins had asked Jack Phillips to make their wedding cake. ( AP: David Zalubowski )

Can businesses can now refuse gay customers?

No. The Supreme Court was very clear that it was not deciding the question of whether a person with religious objections to same-sex marriage had a general right to refuse to serve gay customers.

It found that:

The outcome of cases like this in other circumstances must await further elaboration in the courts, all in the context of recognising that these disputes must be resolved with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market.

American state and federal laws prohibiting discrimination against same-sex couples remain in place.

Despite this, public perception is often different to legal reality. However narrow the judgment, some businesses — in the US or even in Australia — may wrongly think the decision allows bakers and others to lawfully refuse service to same-sex couples.

Will there be another gay wedding cake case?

Yes. The Supreme Court will almost certainly end up hearing a similar case in the future, with an upcoming Washington florist's case being the most likely.

Justice Kennedy began his Masterpiece judgment by stating that, "Our society has come to the recognition that gay persons and gay couples cannot be treated as social outcasts or as inferior in dignity and worth". He also noted that religious protections do not generally extend to business owners refusing to provide equal access to goods and services.

It is likely that this perspective will influence the way the Supreme Court decides any future cases.

Further afield, the Supreme Court of the United Kingdom has recently heard arguments in a case where a baker in Northern Ireland refused to make a cake with a pro-marriage equality message on it.

No Australian "gay wedding cake" case has arisen since same-sex marriage became legal last year.

Baker Jack Phillips is congratulated after his Supreme Court victory. ( AP: David Zalubowski )

How would an Australian case be decided?

Australia does not have an explicit constitutional protection of free speech like America does. Australia does have a constitutional protection of religious freedom based on the American free exercise clause, but this protection has largely been read down by Australian courts and applies only to the Federal Government.

Gay wedding cake cases in Australia would be resolved through state and federal anti-discrimination laws which protect LGBTI people.

Refusal of service for a same-sex wedding is probably unlawful under all LGBTI anti-discrimination laws in Australia — except in Victoria which has a wide religious exemption for all individuals. All other states and territories, and federal laws, provide exemptions only for religious bodies and not for ordinary businesses.

Wider religious exemptions may be introduced in the near future. The Ruddock religious freedom review received numerous submissions arguing for the right of all business and individuals to refuse service to same-sex weddings on religious grounds.

Media reports suggest that the Ruddock panel will not propose this type of expansion. But this doesn't mean such exemptions won't be introduced. Last week, New South Wales upper house MP Fred Nile introduced a Bill that would allow bakers, florists and others to refuse service to same-sex weddings, and even allow lawyers to refuse service for same-sex divorces.

There is no doubt that those who argue for wider religious exemptions in Australia will rely on the Masterpiece Cakeshop decision to further justify this expansion — indeed, this link has already been drawn by Australian Conservatives candidate Lyle Shelton. This misunderstands Justice Kennedy's narrow decision.

Australian law reform debates should focus on the respective merits of non-discrimination and religious freedom principles in Australia, rather than American case law.

Whatever the approach taken in the coming months, Australian advocates should not try to have their cake and eat it, too.

Liam Elphick is a lecturer at the University of Western Australia Law School. Luke Beck is an associate professor of Constitutional Law at Monash University.