Any market maker's bid-ask spread will be dictated by a combination of factors, including aspects like latency (relative to competitors), expectations on holding time, historical volatility and spread (that one is somewhat circular), availability of information from correlated markets, ability to hedge into correlated markets (and what are _those_ spreads, as the market maker will be crossing that spread to hedge), trading fees, etc.

In markets where many of those aspects can be minimized, market makers will end up very tight and the dominant factor becomes latency. a fast market maker can offer a tighter spread to counterparties and will see a virtuous cycle of increased trading opportunities leading to revenue to stay fast.

If the other factors remain significant risks, then the benefits of latency optimization fall off. So, spread and latency are related, but other market fundamentals do play a part.