I understand that the use of circle hooks is very popular for flies for Tarpon. This is from those I know who have used them and them saying they are extensively used from those they know. I have no personal knowledge so I can not even speculate as to how they work myself. Mark Sosin has stated in his web site.."Jack Callion prefers J-hooks over circle hooks for tarpon. I don't totally agree with him. It's not so much concern over gut hooking the fish as it is the number of hookups and the ease of "setting" the hook (which you don't really do with a circle hook). You can gut hook a fish on occasion with a circle hook. They are not foolproof.
As you know, the mouth of a tarpon has the consistency of a poorly crafted cinder block. There are only a few places where a hook will penetrate. Keep in mind that I respond and react to a strike with a J-hook or a circle hook the same way. Without moving the rod, I begin reeling until the line comes absolutely tight and the fish is on or I missed it. I use a loop knot with a circle hook because the hookup ratio improves. The fish has to set a circle hook by swimming away.
After a lifetime of fishing, I have finally learned that regardless of the style hook you use, the less you do to set it, the more fish you will catch. "