Heat oven to 375° F. Butter a shallow 3-quart baking dish. In a large bowl, combine the cream, horseradish, nutmeg, 1 1/2 teaspoons salt, and 3/4 teaspoon pepper. Add the potatoes and toss to coat.
Transfer the potato mixture to the prepared baking dish, pressing gently to submerge the potatoes. Cover the dish with foil, place on a rimmed baking sheet, and bake for 25 minutes. Remove the foil and bake until the potatoes are tender and the top is golden, 50 to 65 minutes.
Make-Ahead Tip: Prepare and assemble the gratin. Cover and refrigerate for up to 8 hours. To cook, follow the recipe instructions, adding 25 to 35 minutes to the cooking time.