Let$\newcommand{\mM}{\mathcal{M}}$ $\mM\_{1,1}$ be the moduli stack of elliptic curves. Let $R$ be a Dedekind domain, say $\mathbb{Z}[1/N]$ for simplicity, and suppose we have a finite etale cover:


$$\mM\rightarrow\mM\_{1,1}[1/N]$$
Must the coarse moduli scheme $M$ of $\mM$ be smooth over $\mathbb{Z}[1/N]$? This is certainly true if $\mM$ is representable, since $\mM\_{1,1}$ is smooth over $\mathbb{Z}$. Furthermore, for a geometric point Spec $k\rightarrow$ Spec $R$ of characteristic not 2 or 3, $M\_k$ is the coarse moduli scheme of $\mM\_k$, which is normal since it's the quotient of the scheme $\mM\times\_{\mM\_{1,1}[1/N]} \mM(N^2)$ by $GL\_2(\mathbb{Z}/N)$, where $\mM(N^2)$ is the representable stack over $\mathbb{Z}[1/N]$ classifying elliptic curves with full level $N$ structure. Since $M\_k$ is a normal curve, it's smooth, and thus since $R$ is a Dedekind domain, we find that $M[1/6]$ is smooth over $\mathbb{Z}[1/6N]$.


The same argument doesn't work at $p = $ 2 or 3, since for a residue field $k$ of $R$ of characteristic 2 or 3, $M\_k$ is not necessarily the coarse moduli scheme of $\mM\_k$ (the stack is not tame over 2 and 3). Certainly the only potential singularities are the preimages of $j = 0\equiv 1728\mod p$ in $M\_k$.


Is this a real obstruction? Of course if $\mM$ is representable then this is a non-issue, and maybe for special problems like $\Gamma\_0(N)$ one can use division polynomials, but that's kind of ad hoc. I'd like to understand better what can go wrong generally speaking. If this is a real problem, then can we at least say it's flat?



are the coarse moduli schemes of finite etale covers of $\mathcal{M}_{1,1}$ smooth?
Yes, $M$ is smooth. 


In proving this we may focus on a fixed residue characteristic, so we loose no generality by assuming that $N$ is divisible by a prime $\ell \ge 3$. The morphism $\mathcal{Y}(\ell)[1/N] \rightarrow \mathcal{M}\_{1, 1}[1/N]$ is a $\mathrm{GL}\_2(\mathbb{Z}/\ell\mathbb{Z})$-torsor, and so is its base change $\mathcal{Y}(\ell)[1/N]\_{\mathcal{M}} \rightarrow \mathcal{M}$. Moreover, $\mathcal{Y}(\ell)[1/N]\_{\mathcal{M}}$ is a smooth $\mathbb{Z}[1/N]$-curve (say, by IV.2.5 in Deligne--Rapoport) and $M$ is the categorical (ring of invariants) quotient $\mathcal{Y}(\ell)[1/N]\_{\mathcal{M}}/\mathrm{GL}\_2(\mathbb{Z}/\ell\mathbb{Z})$. In order to conclude it remains to recall the following useful theorem from the appendix of Katz--Mazur (see "Notes on Chapters 8 and 10").


**Theorem.** If $S$ is a Noetherian regular scheme and $X \rightarrow S$ is a relative curve that is affine over $S$ and that is equipped with an $S$-linear action of a finite group $G$, then the categorical quotient $X/G$ is a smooth $S$-curve.


The argument is the same one that also proves smoothness of coarse moduli spaces in the case of congruence level modular curves away from the level (see, for instance, the footnote on 10.10.3 (5) in Katz--Mazur) and works over any Dedekind domain $R$ as in your question.


