Does the physical distance between players effect latency?

[SteveW]

The ultimate limit is the speed of electrical signals in cables which, at best, could be the speed of light (300,000,000m/s). So in a millisecond light goes 300km. London to San Francisco is about 8600km, so the best possible latency is about 28ms, giving a round trip delay of 46ms. In practice, every intermediate router or other network device introduces a bit of delay. Also, light goes slower in any medium except a vacuum. I may be a bit out of date with my figures, but the actual latency for just the transatlantic cable from UK to East Coast USA is between 40 and 80 ms round-trip delay (depending which cable your packets are routed over).