I'm no expert but it seems to me that the problem comes from the peer-to-peer connections Spacelords utilizes.
Unfortunately, this game is not super popular and so the matches you get will most likely be based in more remote locations than California. And those 999 ping could really be anything from a very bad host to some other type of connection obstacle, such as weather or what have you.
I have had very good ping playing with EU region people and very bad ping with NA region people. My connection is based in NA. Though recently I have noticed a significantly reduced amount of lag in both cases.
The solution is..nebulous. You can try to play at more peak hours; more players will give you better chance at a better connection. When I play at 2 AM PST I notice a lot more lag, probably because most players in my area are asleep by then. Inversely, when I play at 7 PM PST I find the lag is almost non-existent.
Being the host might mitigate the problem but it seems to choose one based off an intent towards a better connection for everyone overall. So, it is impossible to guarantee.
The inclusion of a ping-filter is probably already standard in the netcode that Spacelords uses. There are an enormous amount of factors that go into match selection; player MMR, Antagonist MMR, wins in a row, losses in a row, good connection and probably many more I am unaware of.
Match selection systems are generally designed to make the best choice possible to ensure a quick match start while having a balanced, gameplay-wise, fight.
Unfortunately, we do not have dedicated servers as they are costly and require a lot of maintenance. If the game became more popular then it might be foreseeable in the future but as it is this is a pipe-dream.
Also, I believe the low ping option is for yourself. It determines if you are to be selected as a host or not. It is by default on but if you turn it off then you won't be selected for host. I could be wrong, I haven't really messed with the options a lot lately.
Finally, yeah we all have experienced this problem. Peer-to-peer has this fallibility.
