Preheat oven to 375F. Line a baking sheet with foil. Coat a large casserole dish or cast iron skillet with cooking spray.

Combine cheeses in a small bowl. Arrange one-third of the potatoes in the bottom of the casserole, season with salt and pepper, and top with one-third of the cheese mixture. Repeat the layers twice more ending with a layer of the cheese mixture.

In a small saucepan, bring milk, heavy cream, garlic and nutmeg to a simmer and remove from heat. Pour the cream mixture over the layers and cover the pan with foil.

Set the casserole on the prepared baking sheet and bake the gratin until the potatoes are almost tender, about 45 minutes. Remove the foil and continue to bake until the potatoes are golden on top, 20 to 25 minutes longer. Let stand for 10 minutes before serving.