Demonstrators in Indianapolis protest the religious freedom bill recently signed by Gov. Mike Pence. (Nate Chute/Reuters)

INDIANA’S LEADERS are scrambling to “clarify” the state’s contentious new religious freedom law, which has attracted a tsunami of criticism since Gov. Mike Pence (R) signed it last week. But if they continue to skirt questions about how Indiana businesses can legally treat lesbians, gay men, bisexuals and transgender people, they will neither get nor deserve an end to the scrutiny. The best way out of this self-imposed controversy is to legislate basic civil protections for people whose sexual orientation puts them in a minority.

Mr. Pence and other defenders of Indiana’s law claim that the Religious Freedom Restoration Act (RFRA) is not a license to discriminate. It’s true that the law does not directly authorize discrimination in the workplace, in housing or in public accommodation. But it could have real discriminatory effects nonetheless.

First, a handful of Indiana cities and towns have enacted nondiscrimination ordinances that protect LGBT people. If the owners of a wedding venue refuse to rent their space for a same-sex ceremony and end up in a lawsuit, they could cite Indiana’s RFRA to insist that such local nondiscrimination requirements do not apply to them. Depending on how courts rule in such disputes, legal protections could be eroded.

Second, the law could make landlords, employers and business owners more comfortable in discriminating against LGBT people. Here it’s important to point out that such discrimination, in Indiana and many other states, was legal before RFRA and remains legal now. Most Indiana localities don’t protect LGBT civil rights and the state doesn’t include sexual orientation or gender identity in its anti-discrimination policy, and Mr. Pence made clear Sunday he’s not about to change that. In fact, most states lack anti-discrimination protections for LGBT people, so discrimination in all sorts of civil contexts is perfectly legal across the country. Indiana may not be remarkable in this regard, but that just means it has a lot of bad company.

We won’t pretend that it’s easy sorting out disputes between devout Christian bakers and the gay couple that is refused a wedding cake. Both sides tap into deep American values — religious freedom and small-business independence on one hand and equality of treatment on the other. But the same could have been said about interracial marriage a couple of generations ago. Businesses that operate in the public sphere generally assume an obligation to serve the public.

Red states are capable of having a productive discussion about this. Utah just granted anti-discrimination protections in employment and housing to its LGBT citizens. They were limited in some important ways — the proverbial bakers wouldn’t have to serve a gay wedding. But Utah’s law nevertheless represents incremental progress. That’s a much better example than the one Indiana has set over the past week.