Layer the potatoes and onions in an aluminum foil pan or cast iron skillet.
Cook the butter in a small saucepan over medium until melted. Add the flour and cook for a couple of minutes until golden brown.
Add the milk and cook the sauce for about 5 minutes until it has thickened enough to coat the back of a spoon.
Remove from heat and add the cheese and seasonings.
Pour the sauce over the layered potatoes.
Cook the scalloped potatoes on the smoker uncovered for 2 hours at 250. Then cover with foil and cook an additional 1-2 hours until they are fork-tender.
Optional: Top with more shredded cheese during the last 15 minutes of cooking.