This!
However, the seemingly well intentioned governor of CA did open up a Pandora's box of unintentional issues that haven't been explored. Some have been mentioned above.
Title IX will be a bigger issue than thought because all of the SJW's will be out in force talking about things like gender pay gap, etc. I think we all know the economics arguements, but don't think this won't become an issue. California will be ground zero for this. Do we end up with a system where the athlete has a significant "franchise fee" withheld due to association with a university's brand that than gets "distributed" to other student athletes.
Taxes - regardless of who pays the $, the IRS and state governments will absolutely come after their share of $, especially since the $ will no longer be shielded by the non profit status of the universities. Almost think this is one of the underlying reasons for CA passing the bill because they see tax revenues that could be generated from this that they aren't getting today. I don't think kids will get thrown in jail per se as was intimated above, but the IRS/states may extract their share of penalties if the laws/rules aren't followed and those could be substantial if the athletes aren't getting the proper advice/representation
Amateur status - This could also become a bigger deal because at what point do the universities decide that having semi-pro athletics associated with the school is not part of the university mission. Like Greg Fenves has always said, athletics is the front door to the university which is extremely important in terms of alumni engagement and fundraising but if it begins to get too unwieldy to manage, do institutions change their mind. I think that there will be a number of universities that "bow out" of big time college athletics because the juice won't be worth the squeeze (Rice would be a perfect example of a school that may move that direction)
As is typical with government "interventions", we pass the bill and sort out the details later, but it is clear that the full ramifications of this have not been fully considered (hello law of unintended consequences). The NCAA probably has limited recourse on this, but if they wanted to slow the train down, they should immediately announce that if the law goes into effect, that schools from the state of California will be ineligible to complete in any NCAA competition (no March Madness, no road to Omaha, etc.). Football is a slightly different beast since the NCAA doesn't control it per se, but could influence the CFP to not select CA teams and even pull the Rose Bowl from the CFP rotation. By isolating California, the NCAA would then have a decision to make. It could either work to come up with a system that works for all member institutions or dig in its heels and say no way in hell. If the NCAA digs in its heels, the can would get kicked down the conferences and university regents who would then have to decide what course to take.
Long term, athletes will probably be compensated in some form, but how we get there and what collateral damage occurs along the way is anyone's guess.